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Poverty Effects of Remittances: a Comparative Analysis
Author(s) -
Majeed Muhammad Tariq
Publication year - 2015
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.3055
Subject(s) - poverty , economics , panel data , developing country , development economics , demographic economics , economic growth , econometrics
This paper studies the impact of remittances on cross‐country poverty using a panel data set from 65 developing counties over a long period 1970–2008. This study differs from the existing literature on poverty impact of remittances by explicitly noting the importance of financial development in shaping the link. This analysis shows that the effect of remittances on poverty depends on the level of financial development of a remittances receiving economy. Those economies that have a low level of financial development seem to acquire an unfavourable effect of remittances while economies with comparatively developed financial systems do not suffer from the adverse effects of remittances. In sum, remittances accentuate not ameliorate poverty in countries with the low level of financial development. Copyright © 2014 John Wiley & Sons, Ltd.