Impact of International Remittance on Rural Household Asset Building: The Case of Mirab Soro Woreda, Hadiya Zone, Central Ethiopia

Yisihak Ergicho Ababbo and Dawit Dafar

International Journal of Finance, Insurance and Risk Management, 2024, vol. 14, issue 2, 131-175

Abstract: Purpose: The main objective of this study was to assess the impact of international remittances on rural household asset building. Design/Methodology/Approach: This study was used primary household survey data collected from three major rural kebeles of Mirab Soro Woreda from Hadiya Zone, Central Ethiopia Region, Ethiopia. Both primary and secondary sources of data were used. The collected data were analyzed by both descriptive and econometric analysis; using propensity score matching model. The total of sample households were selected from receiver of remittances and non-receivers of remittances 146 and 186 respectively. Findings: The result of this study finds that international remittances substantially increase the level of asset building and decrease future rural household vulnerability. As the result revealed on average about 52.7% of recipient household’s total capital asset were greater than non-recipients and recipients have more cost on children schooling than non-recipients. The household asset positively influenced by tropical livestock, saving, investment, and income and negatively influenced by farm land size housing, consumption and child education. The estimated result of ATT that remittances has brought a positive and significant impact on total capital of household asset and child education expenses. The study concluded that remittance has positive impact on rural household asset building. Practical Implications: The government should develop policies that encourage the inflow of remittances; such as providing better and relatively cheap means of transferring remittance, and developing an appropriate regulatory framework and monitoring mechanism on flow of remittances. Originality/Value: International remittances recipient of rural households builds more assets than non-recipient households.

Keywords: International remittances; asset building; child education; housing; PSM and Impact. (search for similar items in EconPapers)
JEL-codes: E21 F24 O15 Q12 R23 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ers:ijfirm:v:14:y:2024:i:2:p:131-175

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