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Title IMPACT OF REMITTANCES ON HOUSEHOLD WELFARE: A CASE STUDY OF DISTRICT LOWER DIR IN PAKISTAN

Author(s) Mr. Haider Farooqe

Abstract This research thesis examines the impact of foreign remittances on household welfare. Primary data are used for this purpose. Data have been collected through questionnaires from 403 households in district Lower Dir, Pakistan. Randomly 35 villages were selected from the entire district for survey. Stratified Sampling Technique has been used for further selection of remittances receiving and non-remittances receiving households. Both types of households (remittances receiving and non-receiving households) are given equal share in total sample size. The study covers information about five main determinants of household welfare, i.e. education, wealth, food, poverty and health. OLS model is used for first three determinants (i.e. education, wealth and food) and Logit & Probit models have been used for last two determinants (i.e. poverty and health).The results indicate that remittances have a positive and significant impact on household education, wealth status and food consumption. Remittances raise the income level of remittances receiving households, which is further used for educational expenditures. Consequently, remittances receiving households spend more income on education than non-receiving remittances households. Remittances and child’s enrolment in schools are positively correlated. In addition, remittances receiving households have been found with higher wealth status and having more assets than non-receiving households. Indeed, total monthly income has a positive and significant impact on household wealth score. The results show that increase in total monthly income leads to pushing up the wealth score of the household. A big share of incoming remittances is used for the purpose of food consumption. The results also conclude that remittances receiving households spend more than non-receiving households for food expenditures. On the other hand, results also show that 76% of the remittances receiving households are above the poverty line and only 8% non-receiving households are above the poverty line. It means that foreign remittances reduce household poverty level. If a household receives foreign remittances then it is more likely for them to be above the poverty line and less likely to be below poverty line. In other words, when a household turns from non-receiving to a receiving household its probability of being non-poor also rises. Results also concluded that 83% of remittances receiving households can fulfill the basic needs of healthcare (i.e. transportation cost on healthcare, hospital and doctor fee, diagnostic tests charges, medicine cost). On other hand, only 36% of remittances non-receiving households can afford the needs of healthcare. The results establish positive relationship between foreign remittances and household’s health status. Remittances receiving households can easily fulfill the needs of healthcare. Moreover, remittances receiving households prefer private hospitals to government hospitals for their treatment. Conversely, remittances non-receiving households prefer medical facilities provided by the government instead of private hospitals. Keywords: Remittances and Welfare, Education, Wealth, Food, Poverty and Health JEL Classification: F24, I31, I20, D31, I32, I10

Type Thesis/Dissertation PhD

Faculty Management Sciences

Department Economics

Language English

Publication Date 2019-08-30

Subject Economics

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