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Impact of remittances on poverty: an analysis of data from a set of developing countries

Author

Listed:
  • Basanta K Pradhan

    () (Institute of Economic Growth, Delhi)

  • Malvika Mahesh

    () (Institute of Economic Growth, Delhi)

Abstract

Remittances from international migrants constitute the largest source of financial inflows to developing countries. Poverty is a sensitive issue in developing countries, making the relationship between remittances and poverty important. In this paper, we analyze data from 25 developing countries for three years to determine the effects of total remittances received and net remittances received on poverty. We find that both are effective in reducing poverty. We find that GDP per capita and poverty have a negative relationship and higher income inequality implies more poverty. This paper supports the view that inward remittances reduce poverty in developing countries.

Suggested Citation

  • Basanta K Pradhan & Malvika Mahesh, 2016. "Impact of remittances on poverty: an analysis of data from a set of developing countries," Economics Bulletin, AccessEcon, vol. 36(1), pages 108-117.
  • Handle: RePEc:ebl:ecbull:eb-15-00346
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2016/Volume36/EB-16-V36-I1-P13.pdf
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    References listed on IDEAS

    as
    1. Basanta K Pradhan & Malvika Mahesh, 2014. "Impact of trade openness on poverty: a panel data analysis of a set of developing countries," Economics Bulletin, AccessEcon, vol. 34(4), pages 2208-2219.
    2. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
    3. Gupta, Sanjeev & Pattillo, Catherine A. & Wagh, Smita, 2009. "Effect of Remittances on Poverty and Financial Development in Sub-Saharan Africa," World Development, Elsevier, vol. 37(1), pages 104-115, January.
    4. Adams, Richard Jr. & Page, John, 2005. "Do international migration and remittances reduce poverty in developing countries?," World Development, Elsevier, vol. 33(10), pages 1645-1669, October.
    5. Dean Yang, 2011. "Migrant Remittances," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 129-152, Summer.
    6. Acosta, Pablo & Calderon, Cesar & Fajnzylber, Pablo & Lopez, Humberto, 2008. "What is the Impact of International Remittances on Poverty and Inequality in Latin America?," World Development, Elsevier, vol. 36(1), pages 89-114, January.
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    Cited by:

    1. repec:ebl:ecbull:eb-16-00558 is not listed on IDEAS
    2. El Hamma Imad, 2017. "Do political institutions improve the effect of remittances on economic growth? Evidence from South-Mediterranean countries," Post-Print halshs-01655347, HAL.
    3. Taha Zaghdoudi & Abdelaziz Hakimi, 2017. "Does external debt- poverty relationship confirm the debtoverhang hypothesis for developing counties?," Economics Bulletin, AccessEcon, vol. 37(2), pages 653-665.
    4. repec:ebl:ecbull:eb-17-00318 is not listed on IDEAS

    More about this item

    Keywords

    Poverty; Remittances; Developing;

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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