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Remittances Increase GDP with Potential Differential Impacts Across Countries

By KESLS RAM
 On average, we find that a 10% increase in remittance is associated with a 0.66% permanent increase in GDP. It is important to contextualize this average result: Given the evidence of negative spillover effects of other non-market transfers such as social insurance programs and the immense benefits of remittances in alleviating poverty, this relatively benign aggregate impact of remittance on output we find is a desirable outcome. Importantly, our finding highlights that remittances are not simply outgrowing foreign aid in terms of size, but they may be relatively less harmful to growth, and perhaps, a useful driver of long-term output compared to foreign aid.
https://blogs.worldbank.org/en/peoplemove/remittances-increase-gdp-potential-differential-impacts-across-countries

Best Regards
Seetha Ram

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