An Empirical Investigation of the Impact of Foreign Remittances on Poverty in Developing Countries
Mohammad Imran Hossain
Graduate School of Asia Pacific Studies, Ritsumeikan Asia Pacific University, Japan
Keywords: Foreign remittances, Poverty, Developing countries, TSLS.
Abstract
Remittances sent to home countries by migrant workers became significant in amount. Such funds can have profound implications for economic development, human welfare and poverty reduction in a developing country context. This paper examines the impact of foreign remittances on poverty in selected developing countries. A set of time series data has been utilized to empirically check the relationship between remittances and poverty for a list of 44 developing countries worldwide. For the purpose of the study, the ‘Three Stage Least Squares’ (TSLS) regression technique has been applied. A separate analysis for a group of countries among the list which recorded a remittances to GDP ratio of 2% or more has been performed. The study finds that remittances have a significant negative impact on poverty in a developing country.