Great Expectations? Remittances and Asset Accumulation in Pakistan
This study examines asset accumulation patterns of the recipients of foreign and domestic remittances. Using the representative 2010-11 Pakistani householdsâ€™ survey and employing a number of matching routines, we analyse stocks of consumer, productive, housing and financial assets among migrantsâ€™ stay-behind households. We find that asset accumulation among remittance-receiving households depends upon the nature and magnitude of remittances as well as the economic situation and geographical location of the recipient households. Foreign remittances lead to a substantial increase in household assets while no significant change results from domestic remittances. Households receiving foreign remittances hold a higher stock of assets for all categories of assets, even though the increase in productive assets is low. Moreover, rural and poor recipients of foreign remittances accumulate more assets than their non-recipient counterparts. Asset accumulation also increases with the amount of remittance received. Findings show that foreign remittances are considered as a mainly transitory income, and are used to generate precautionary savings in cash and kind.
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|Date of revision:||Jan 2015|
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