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Remittances in Pakistan: Why They Have Gone Up and Why They Are Not Coming Down

Author

Listed:
  • Udo Kock

    (Resident Representative in the West Bank and Gaza for the International Monetary Fund (IMF))

  • Yan Sun

    (Senior Economist in the IMF's European Department)

Abstract

The flow of workers’ remittances to Pakistan has more than quadrupled in the last eight years and shows no sign of slowing down, despite the economic downturn in the Gulf Cooperation Council and other important host countries for Pakistani workers. This paper analyses the forces that have driven remittance flows to Pakistan in recent years. A methodological innovation is that we study the behaviour of per capita remittances and draw a close link between remittances and remitters’ earning capacity, in the belief that higher earning power leads to more remittances. Our main conclusions are that (i) the growth in the inflow of workers’ remittances to Pakistan is in large part due to an increase in worker migration, (ii) the higher skill levels of migrating workers has helped boost remittances, and (iii) other imporant determinants of remittances to Pakistan are agricultural output and the relative yield on investments in the host and home countries.

Suggested Citation

  • Udo Kock & Yan Sun, 2011. "Remittances in Pakistan: Why They Have Gone Up and Why They Are Not Coming Down," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 50(3), pages 189-208.
    • Handle: RePEc:pid:journl:v:50:y:2011:i:3:p:189-208
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    File URL: http://www.pide.org.pk/pdf/PDR/2011/Volume3/189-208.pdf
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    Citations

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    Cited by:

    1. Sidra Feroz & Bushra Yasmin, 2021. "Terrorism and Brain Drain in Pakistan: Is There a Connection?," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 22(1), pages 73-87, March.
    2. Chan Bibi & Amjad Ali, 2021. "Do Remittances Impact Human Development in Developing Countries? A Panel Analysis of Selected Countries," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 7(2), pages 27-42, June.
    3. Ahmed, Junaid & Martinez-Zarzoso, Inmaculada, 2014. "What drives bilateral remittances to Pakistan? A gravity model approach," University of Göttingen Working Papers in Economics 209, University of Goettingen, Department of Economics.
    4. Ahmed, Junaid & Martínez-Zarzoso, Inmaculada, 2015. "Do transfer costs matter for foreign remittances? A gravity model approach," Economics Discussion Papers 2015-12, Kiel Institute for the World Economy (IfW Kiel).
    5. Michael A. Clemens & David McKenzie, 2018. "Why Don't Remittances Appear to Affect Growth?," Economic Journal, Royal Economic Society, vol. 128(612), pages 179-209, July.
    6. Faridoon Khan & Amena Urooj & Farman Ullah Khan, 2020. "Factors Affecting Economic Growth: A Comparative Analysis of Democratic and Non-Democratic Eras of Pakistan," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 2(2), pages 61-71, December.
    7. Kumar, Ronald/R, 2011. "Role of Trade, Aid, Remittances and Financial Development in Pakistan," MPRA Paper 38871, University Library of Munich, Germany.
    8. Michael Clemens and David McKenzie, 2014. "Why Don't Remittances Appear to Affect Growth? - Working Paper 366," Working Papers 366, Center for Global Development.
    9. Imen Mohamed Sghaier, 2021. "Remittances and Economic Growth in MENA Countries: The Role of Financial Development," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 43-59, March.

    More about this item

    Keywords

    Workers’ Remittances; Migration; Pakistan;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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