IDEAS home Printed from https://ideas.repec.org/a/eme/ijsepp/ijse-12-2014-0271.html
   My bibliography  Save this article

Safety net for agriculture: effect of idiosyncratic income shock on remittance payments

Author

Listed:
  • Eric Akobeng

Abstract

Purpose - The purpose of this paper is to examine the effect of illness-driven agriculture income shocks on remittance payments in Ghana using a nationally representative household pseudo-panel data set for 1991/1992, 1998/1999 and 2005/2006. Design/methodology/approach - The two-stage least square instrumental variable technique is used. This is compared with the ordinary least squares estimator. Findings - The author finds that households in Ghana use remittances to protect themselves from negative agriculture income shocks. The study further reveals that the protection is resilient in female-headed households. Research limitations/implications - The question of remittances as a safety net mechanism is interesting, but the limitation is the challenges involving the counterfactual setup in studying the effects of endogenous migration choices. Practical implications - The study provides that, as far as microeconomic factors are concerned, remittances increase in times of negative agriculture income shocks attributed to illness in Ghana. Social implications - The finding points to the fact that remittance payments play an essential role as an informal safety net during illness-driven agriculture income shock especially for female-headed households in Ghana. This has an important implication for poverty reduction in Ghana. Originality/value - It provides an empirical test of the claim that remittance flows buffer idiosyncratic shock with micro-level household data that incorporates both internal and international remittances. The paper introduces gender dimension into idiosyncratic shocks’ impact. Also, the data set makes it possible to provide a reliable set of agriculture income shock estimates.

Suggested Citation

  • Eric Akobeng, 2017. "Safety net for agriculture: effect of idiosyncratic income shock on remittance payments," International Journal of Social Economics, Emerald Group Publishing, vol. 44(1), pages 2-20, January.
  • Handle: RePEc:eme:ijsepp:ijse-12-2014-0271
    as

    Download full text from publisher

    File URL: http://www.emeraldinsight.com/10.1108/IJSE-12-2014-0271?utm_campaign=RePEc&WT.mc_id=RePEc
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:ijsepp:ijse-12-2014-0271. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman). General contact details of provider: http://www.emeraldinsight.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.