Remittances and Poverty: Panel Evidence from High Remittance Economies

Gazi Hassan ()

MPRA Paper from University Library of Munich, Germany

Abstract: The growth effects of remittances are controversial, but their welfare effects are less so. This paper provides evidence on the effect of remittances on poverty in an unbalanced panel of 40 high remittances economies. The endogeneity issue, driven by the possibility that remittances and poverty may have bidirectional causality, is tackled by a system estimation technique using the seemingly unrelated regression estimator (SURE) that not only allows both to be jointly determined but also allows the error terms of the simultaneous equations to be contemporaneously correlated. Using bootstraps, heteroskedasticty robust standard errors of the SURE regressions are reported and the estimates show that remittances significantly reduce poverty. On the other hand, remittances decline with the wake of widespread poverty. There is consistent evidence that remittances also decline with increases in health index of the general population. However, improvements in the health outcomes of poor people are associated with more remittances. Finally, there is some limited evidence that remittances rise with increases in educational attainments of the general population, but fall as the poor people become more educated.

Keywords: Remittances; Poverty; Panel Data; Seemingly Unrelated Regression (SURE). (search for similar items in EconPapers)
JEL-codes: C15 C33 I32 (search for similar items in EconPapers)
Date: 2010-10-31
New Economics Papers: this item is included in nep-dev and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/26445/1/MPRA_paper_26445.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:26445

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().