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Impact of Remittances on Economic Growth and Poverty: Evidence from Pakistan

  • Qayyum, Abdul
  • Javid, Muhammad
  • Arif, Umaima

The study focused on the importance of remittances inflow and its implication for economic growth and poverty reduction in Pakistan. By using ARDL approach we analyze the impact of remittances inflow on economic growth and poverty in Pakistan for the period 1973-2007. The district wise analysis of poverty suggest that overseas migration contributes to poverty alleviation in the districts of Punjab, Sindh and Balochistan however NWFP is not portraying a clear picture. The empirical evidence shows that remittances effect economic growth positively and significantly. Furthermore the study also finds that remittances have a strong and statistically significant impact on poverty reduction thus suggesting that there are substantial potential benefits associated with international migration for poor people in developing countries like Pakistan. So the importance of remittance inflows can not be denied in terms of growth enhancement and poverty reduction that consequently improves the social and economic conditions of the recipient country.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 22941.

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Date of creation: 2008
Date of revision:
Handle: RePEc:pra:mprapa:22941
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  1. Catrinescu, Natalia & Leon-Ledesma, Miguel & Piracha, Matloob & Quillin, Bryce, 2006. "Remittances, Institutions and Economic Growth," IZA Discussion Papers 2139, Institute for the Study of Labor (IZA).
  2. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
  3. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September.
  4. Rashid Amjad, 1986. "Impact of Workers' Remittances from the Middle East on Pakistan's Economy: Some Selected Issues," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 25(4), pages 757-785.
  5. Rizwana Siddiqui & A. R. Kemal, 2006. "Remittances, Trade Liberalisation, and Poverty in Pakistan: The Role of Excluded Variables in Poverty Change Analysis," PIDE-Working Papers 2006:1, Pakistan Institute of Development Economics.
  6. Bichaka Fayissa & Christian Nsiah, 2008. "The Impact of Remittances on Economic Growth and Development in Africa," Working Papers 200802, Middle Tennessee State University, Department of Economics and Finance.
  7. Robert E.B. Lucas, 2005. "International Migration and Economic Development," Books, Edward Elgar, number 3826.
  8. Robert Burgess & V. Haksar, 2005. "Migration and Foreign Remittances in the Philippines," IMF Working Papers 05/111, International Monetary Fund.
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