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The impact of remittance inflows on economic growth, unemployment and income inequality: An international evidence

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Abstract

This study explores the impact of remittance inflows on economic growth, unemployment, and income inequality for high-, low-, and middle-income countries from 1991 to 2020 using fixed effects, random effects, and fully modified ordinary least square estimates. The outcomes confirm that remittance inflows spur the economic growth not only in low- and middle-income countries, but also in high-income countries. However, the remittance inflows increase the unemployment in high-income countries while reducing it in low- and middle-income countries. The income inequality model validated the income inequality mitigating role of remittance inflows across all countries. Based on the estimated outcomes, the study proposes possible  policy measures in concluding section.

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Available upon reasonable request from the corresponding author or data is publically available from World Bank.

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Notes

  1. According to World development indicators, remittance is high in most of the countries from middle- and low-income groups; where from the top remittance-receiving country is India (83 billion) followed by China (60 billion), Mexico (43 billion), the Philippines (35 billion), and Egypt (30 billion). (https://www.migrationdataportal.org/themes/remittances).

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Authors and Affiliations

  1. Department of Humanities and Social Sciences, Indian Institute of Technology, Kharagpur, West Bengal, 721302, India

    Shreya Pal, Muhammed Ashiq Villanthenkodath, Gupteswar Patel & Mantu Kumar Mahalik

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  1. Shreya Pal
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  2. Muhammed Ashiq Villanthenkodath
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SP: idea proposed, writing, and estimation. MAV: writing—original draft. GP: writing—original draft: MKM: supervision-editing, final input.

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Correspondence to Muhammed Ashiq Villanthenkodath.

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Appendix

Appendix

High-income countries (16): Australia, Canada, Chile, Croatia, Czech Republic, Hungary, Iceland, Italy, Japan, Korea, Rep., Malta, The Netherlands, Switzerland, United Kingdom, United States, and Uruguay.


Low-income countries (21): Burundi, Burkina Faso, Central African Republic, Congo, Dem. Rep., Ethiopia, Guinea, Gambia, The, Guinea-Bissau, Liberia, Madagascar, Mali, Mozambique, Niger, Sudan, Sierra Leone, South Sudan, Syrian Arab Republic, Chad, Togo, Uganda, Yemen, and Rep.


Middle-income countries (71): Angola, Albania, Armenia, Azerbaijan, Benin, Bangladesh, Bulgaria, Bosnia and Herzegovina, Belarus, Bolivia, Brazil, Bhutan, Botswana, China, Cote d'Ivoire, Colombia, Comoros, Cabo Verde, Costa Rica, Djibouti, Dominican Republic, Algeria, Egypt, Arab Rep., Georgia, Guatemala, Honduras, India, Iran, Islamic Rep., Iraq, Jamaica, Jordan, Kenya, Kyrgyz Republic, Lao PDR, Sri Lanka, Lesotho, Moldova, Maldives, Mexico, North Macedonia, Myanmar, Montenegro, Mongolia, Mauritania, Malaysia, Namibia, Nigeria, Nicaragua, Pakistan, Panama, Peru, Philippines, Papua New Guinea, Paraguay, West Bank and Gaza, Romania, Russian Federation, Senegal, Solomon Islands, Serbia, Eswatini, Thailand, Tajikistan, Timor-Leste, Tonga, Tanzania, Ukraine, Vietnam, South Africa, Zambia, and Zimbabwe.

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Pal, S., Villanthenkodath, M.A., Patel, G. et al. The impact of remittance inflows on economic growth, unemployment and income inequality: An international evidence. IJEPS 16, 211–235 (2022). https://doi.org/10.1007/s42495-021-00074-1

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