The impact of migrant remittances on household welfare in Ghana

Peter Quartey

No RP_158, Research Papers from African Economic Research Consortium

Abstract: Migrant remittances have become a source of external finance whose magnitude exceeds the amount of official development assistance in some developing countries. Balance of payments statistics from the Bank of Ghana indicate the amount of remittances to Ghana exceeds ODA and is a potential force to reckon with particularly considering its growth rate in recent years. It is general knowledge in Ghana that families with migrant workers,particularly those in developed countries, are able to withstand shocks to income. This relationship has not been tested empirically, however, even though the Ghana Living Standards Survey is rich with such micro-data on the economy. This study therefore uses Waves 1 to 4 of the GLSS to investigate whether migrant remittances significantly affect household poverty (welfare). The study found that remittances improve household welfare and help to minimize the effects of economic shocks to household welfare.They do not offset the shocks completely, however, except for food crop farmers (the poorest in Ghana).

Date: 2006-08
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Persistent link: http://EconPapers.repec.org/RePEc:aer:rpaper:rp_158

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