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The impact of migrant remittances on household welfare in Ghana

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Author Info
Peter Quartey
Abstract

Migrant remittances have become a source of external finance whose magnitude exceeds the amount of official development assistance in some developing countries. Balance of payments statistics from the Bank of Ghana indicate the amount of remittances to Ghana exceeds ODA and is a potential force to reckon with particularly considering its growth rate in recent years. It is general knowledge in Ghana that families with migrant workers,particularly those in developed countries, are able to withstand shocks to income. This relationship has not been tested empirically, however, even though the Ghana Living Standards Survey is rich with such micro-data on the economy. This study therefore uses Waves 1 to 4 of the GLSS to investigate whether migrant remittances significantly affect household poverty (welfare). The study found that remittances improve household welfare and help to minimize the effects of economic shocks to household welfare.They do not offset the shocks completely, however, except for food crop farmers (the poorest in Ghana).

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Paper provided by African Economic Research Consortium in its series Research Papers with number RP_158.

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Length: 57 pages
Date of creation: Aug 2006
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Handle: RePEc:aer:rpaper:rp_158

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  1. Solimano, Andres, 2003. "Remittances by Emigrants: Issues and Evidence," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  2. Ralph Chami & Samir Jahjah & Connel Fullenkamp, 2003. "Are Immigrant Remittance Flows a Source of Capital for Development," IMF Working Papers 03/189, International Monetary Fund. [Downloadable!]
  3. Francis Teal, 2004. "Education, incomes, poverty and inequality in Ghana in the 1990s," Development and Comp Systems 0409006, EconWPA. [Downloadable!]
  4. Gupta, Kanhaya L, 1987. "Aggregate Savings, Financial Intermediation, and Interest Rate," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 303-11, May. [Downloadable!] (restricted)
  5. Claudia M. Buch & Anja Kuckulenz & Marie-Helene Le Manchec, 2002. "Worker Remittances and Capital Flows," Kiel Working Papers 1130, Kiel Institute for the World Economy. [Downloadable!]
  6. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 720-44, August. [Downloadable!] (restricted)
  7. Adams, Richard H., Jr., 1991. "The effects of international remittances on poverty, inequality, and development in rural Egypt:," Research reports 86, International Food Policy Research Institute (IFPRI). [Downloadable!]
  8. Gustafsson, Bjorn & Makonnen, Negatu, 1993. "Poverty and Remittances in Lesotho," Journal of African Economies, Oxford University Press, vol. 2(1), pages 49-73, May.
  9. Tunali, Insan, 2000. "Rationality of Migration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(4), pages 893-920, November.
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