Open Access Article

Workers’ Remittances and Socio-Economic Well-Being in Top Ten Remittances Receiving Developing Countries: The Role of Financial Development

Authors

Mahnaz Muhammad Ali(1) Mahnaz Muhammad Ali Corresponding author Affiliation Department of Economics, The Islamia University of Bahawalpur, Pakistan Email addressmahnaz.ali@iub.edu.pk Other articles by this author , Rozina Sadiq(2) Rozina Sadiq Affiliation Department of Economics, University of Punjab, Pakistan Other articles by this author , Muhammad Javed(3) Muhammad Javed Affiliation Department of Economics, The Islamia University of Bahawalpur, Pakistan Other articles by this author

  1. Department of Economics, The Islamia University of Bahawalpur, Pakistan
  2. Department of Economics, University of Punjab, Pakistan
  3. Department of Economics, The Islamia University of Bahawalpur, Pakistan

https://doi.org/10.36923/jcmi.v5i1.570

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Abstract

The present study contributes empirical evidence to the impact of remittances on the socio-economic well-being of recipient nations, particularly through the enhancement of their Human Development Index (HDI) rankings. Utilizing a panel dataset comprising the top ten remittance-receiving countries over the period from 1990 to 2020, the research endeavors to offer a comprehensive analysis of the relationship between remittance inflows and HDI metrics. This investigation delves into the nuanced dimensions of HDI, namely health, education, and income per capita, to discern the specific effects of remittances on each component. The study employs the generalized method of moments (GMM) technique to mitigate potential endogeneity concerns inherent in the relationship between remittances and financial development. The findings of this empirical inquiry suggest that remittances wield a discernible influence on augmenting human well-being, particularly by fostering improvements in health and education outcomes. Additionally, the study identifies a constructive role for financial development in bolstering HDI indicators. In light of these findings, it is recommended that policymakers formulate tailored strategies aimed at facilitating remittance flows, thereby affording migrants enhanced access to robust financial systems.

Article information

Keywords
RemittancesHuman Development Index (HDI)Financial Development
Section
Articles
Issue
Vol. 5 No. 1 (2024)
Submitted
February 21, 2024
Accepted
May 14, 2024
Published
June 14, 2024
Corresponding author
Mahnaz Muhammad Ali
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