The Effects of Remittances on Gender Inequality: Nonlinear Evidence from Highly Remittance-Dependent Countries

A plethora of empirical studies demonstrates that international remittances have socioeconomic effects on recipient countries. However, the impact of remittances on gender inequality - whether they alleviate or exacerbate it - remains largely unknown. This study examines the potential nonlinear relationship between gender inequality and international remittances, utilizing macro-level data from 1991 to 2021, within a sample of 15 low- and middle-income countries (LMICs) in Asia, Africa, and Latin America that are significantly dependent on remittances. We employ both the common correlated effects mean group (CCEMG) and augmented mean group (AMG) methods, which address cross-sectional dependency and slope heterogeneity. We find that remittances have a nonlinear U-shaped effect on gender inequality, suggesting that the gender inequality-reducing effect of international remittances diminishes beyond a certain threshold. This result remains robust when using alternative measures of gender inequality. This study presents a theoretical and empirical framework for the nonlinear gender inequality–remittances nexus, enhancing our understanding of the connection that previous research has overlooked. We recommend that policymakers consider the complex and dynamic effects of remittances on gender inequality.