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Micro-econometric Analysis of Impact of Remittances on Household’s Welfare: Empirical Evidence from District Peshawar

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  • Asmat Ullah

    ()
    (Institute of Management Sciences, Hayatabad, Peshawar)

  • Syed Waqar Hussain

    (Institute of Management Sciences , Hayatabad, Peshawar)

  • Zahoor Khan

    (Department of Economics, University of Peshawar)

Abstract

The present study has been conducted in the year 2010 in district Peshawar to assess the impact of inflow of remittances on household’s welfare. The concept welfare was measured in terms of consumption expenditures of the household. A sample of 60 household was interviewed using snowball sampling combined with the convenient sampling technique. A regression model which was a mixture of direct elasticity and semi-elasticity was used to quantify the relationships. Apart from inflow of remittances (lnremt), three control variables (i.e. years of schooling of the household’s head – edu, age of household’s head – age & family size – fz) were employed to standardize the impact. Controlling for edu, age & edu, this paper conclude that inflow of remittances enhance household’s welfare. All control variables have theoretically correct positive signs. These results were statistically significant and results showed no major econometric problems that can influence statistical inference derived from the model. So it is highly recommended, in light of the present study, that govt. of Pakistan should take all possible steps to export labors abroad. It has dual positive impacts, one enhancing household’s prosperity (welfare) and other reducing unemployment at local level.

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Bibliographic Info

Article provided by Saphira Publishing House in its journal Oeconomics of Knowledge.

Volume (Year): 4 (2012)
Issue (Month): 1 (January)
Pages: 2-13

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Handle: RePEc:eok:journl:v:4:y:2012:i:1:p:2-13

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  1. Marta Ruiz-Arranz & Paola Giuliano, 2005. "Remittances, Financial Development, and Growth," IMF Working Papers 05/234, International Monetary Fund.
  2. Siddiqui, Rizwana & Kemal, A R, 2006. "Poverty-reducing or Poverty-inducing? A CGE-based Analysis of Foreign Capital Inflows in Pakistan," MPRA Paper 2283, University Library of Munich, Germany.
  3. Alderman, Harold, 1996. "Saving and economic shocks in rural Pakistan," Journal of Development Economics, Elsevier, vol. 51(2), pages 343-365, December.
  4. Richard H. Adams, Jr. & John Page, 2003. "International migration, remittances, and poverty in developing countries," Policy Research Working Paper Series 3179, The World Bank.
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