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Can remittances alleviate energy poverty in developing countries? New evidence from panel data

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  • Barkat, Karim
  • Alsamara, Mouyad
  • Mimouni, Karim

Abstract

Universal energy access in developing countries is a key ingredient to achieve sustainable economic growth and social welfare. Therefore, it is of paramount importance for policymakers to identify potential new factors to mitigate energy poverty. In this study, we investigate the effects of workers' remittances on energy poverty in 109 developing countries from 2000 to 2019 using panel fixed and random effects as well as the system generalized method of moment and Lewbel (2012) estimators to address potential endogeneity problems. We demonstrate that remittances can be effectively used to alleviate energy poverty in low and middle-income countries. Moreover, we find that income poverty, human development, institutional quality, and income inequality are important mediating channels through which remittances affect energy poverty. Our results also indicate that improved financial development and increased urbanization tend to enhance energy access. Based on our findings, several recommendations are provided to governments and policymakers for achieving sustainable development goal target 7.1, which aims to guarantee affordable, reliable, and modern energy services for all.

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  • Barkat, Karim & Alsamara, Mouyad & Mimouni, Karim, 2023. "Can remittances alleviate energy poverty in developing countries? New evidence from panel data," Energy Economics, Elsevier, vol. 119(C).
    • Handle: RePEc:eee:eneeco:v:119:y:2023:i:c:s0140988323000257
    DOI: 10.1016/j.eneco.2023.106527
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    More about this item

    Keywords

    Remittances; Energy poverty; Inequality; Sustainable development goals; Panel data;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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