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Remittances and poverty in Ghana

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  • Adams, Richard H. Jr.

Abstract

The author uses a large, nationally representative household survey to analyze the impact of internal remittances (from Ghana) and international remittances (from African and other countries) on poverty in Ghana. With only one exception, he finds that both types of remittances reduce the level, depth, and severity of poverty in Ghana. But the size of the poverty reduction depends on how poverty is being measured. The author finds that poverty is reduced more when international, as opposed to internal, remittances are included in household income, and when poverty is measured by the more sensitive poverty measures-poverty gap and squared poverty gap. For example, the squared poverty gap measure shows that including international remittances in household expenditure (income) reduces the severity of poverty by 34.8 percent, while including internal remittances in such income reduces the severity of poverty by only 4.1 percent. International remittances reduce the severity of poverty more than internal remittances because of the differential impact of these two types of remittances on poor households. Households in the poorest decile group receive 22.7 percent of their total household expenditure (income) from international remittances, as opposed to only 13.8 percent of such income from internal remittances. When these"poorest of the poor"households receive international remittances, their income status changes dramatically and this in turn has a large effect on any poverty measure-like the squared poverty gap-that considers both the number and distance of poor households beneath the poverty line.

Suggested Citation

  • Adams, Richard H. Jr., 2006. "Remittances and poverty in Ghana," Policy Research Working Paper Series 3838, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3838
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    References listed on IDEAS

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    Cited by:

    1. Chowdhury, Mamta B., 2011. "Remittances flow and financial development in Bangladesh," Economic Modelling, Elsevier, vol. 28(6), pages 2600-2608.
    2. 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.
    3. Calvin Z. Djiofack & Eric W. Djimeu & Matthieu Boussichas, 2014. "Editor's choice Impact of Qualified Worker Emigration on Poverty: A Macro–Micro-Simulation Approach for an African Economy," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 23(1), pages 1-52.
    4. Adenutsi, Deodat E. & Ahortor, Christian R.K., 2010. "International remittances – the panacea for underdevelopment? A comparative panel data analysis of Sub-Saharan Africa and Latin America," MPRA Paper 29349, University Library of Munich, Germany.
    5. Puja Guha, 2013. "Migrants' Private Giving and Development: Diasporic Influences on Development in Central Gujarat, India," Working Papers id:5594, eSocialSciences.
    6. Aggarwal, Reena & Demirgüç-Kunt, Asli & Pería, Maria Soledad Martínez, 2011. "Do remittances promote financial development?," Journal of Development Economics, Elsevier, vol. 96(2), pages 255-264, November.
    7. Naiditch, Claire & Vranceanu, Radu, 2009. "Migrant wages, remittances and recipient labour supply in a moral hazard model," Economic Systems, Elsevier, vol. 33(1), pages 60-82, March.
    8. Muhammad Qasim & Amatul Razzaq Chaudhary, 2015. "Determinants of Human Development Disparities: A Cross District Analysis of Punjab, Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 427-446.
    9. Frank Adusah-Poku, 2016. "Which Form of Foreign Capital Inflows Enhance Economic Growth? Empirical Evidence in Sub-Saharan Africa," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(10), pages 557-570, October.
    10. Anzoategui, Diego & Demirgüç-Kunt, Asli & Martínez Pería, María Soledad, 2014. "Remittances and Financial Inclusion: Evidence from El Salvador," World Development, Elsevier, vol. 54(C), pages 338-349.
    11. Francesca Marchetta, 2008. "Migration and non farm activities as income diversification strategies: the case of Northern Ghana," Working Papers - Economics wp2008_16.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    12. Mitrut, Andreea & Wolff, François-Charles, 2011. "Do private and public transfers received affect life satisfaction? Evidence from Romania," Journal of Economic Psychology, Elsevier, vol. 32(6), pages 969-979.
    13. Dimova, Ralitza & Wolff, François-Charles, 2008. "Are private transfers poverty and inequality reducing? Household level evidence from Bulgaria," Journal of Comparative Economics, Elsevier, vol. 36(4), pages 584-598, December.
    14. Lisa Chauvet & Flore Gubert & Sandrine Mesplé-Somps, 2009. "Are Remittances More Effective Than Aid To Reduce Child Mortality? An Empirical Assessment using Inter and Intra-Country Data," Working Papers DT/2009/11, DIAL (Développement, Institutions et Mondialisation).
    15. Laetitia Duval & François-Charles Wolff, 2009. "L'effet des transferts migratoires sur la déforestation dans les pays en développement," Working Papers hal-00421222, HAL.
    16. 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.
    17. Adenutsi, Deodat E., 2011. "Do remittances alleviate poverty and income inequality in poor countries? Empirical evidence from sub-Saharan Africa," MPRA Paper 37130, University Library of Munich, Germany.
    18. Adenutsi, Deodat E., 2010. "Do international remittances promote human development in poor countries? Empirical evidence from Sub-Saharan Africa," MPRA Paper 29347, University Library of Munich, Germany.
    19. Maurice Schiff, 2006. "Migration’s Income and Poverty Impact," Working Papers wp227, University of Chile, Department of Economics.
    20. Fransen, Sonja & Mazzucato, Valentina, 2014. "Remittances and Household Wealth after Conflict: A Case Study on Urban Burundi," World Development, Elsevier, vol. 60(C), pages 57-68.
    21. Adenutsi, Deodat E., 2009. "Long-run macroeconomic impact of international migrant remittances on human development in low-income countries: A panel analysis of sub-Saharan Africa," MPRA Paper 37115, University Library of Munich, Germany.

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    Keywords

    Remittances; Economic Conditions and Volatility; Gender and Development; Small Area Estimation Poverty Mapping; Poverty Lines;

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