Foreign Remittances and Household Poverty: Evidence from Pakistan

Faisal Mehmood Mirza, Muhammad Saim Hashmi, Saima Iqbal and Asif Iqbal

Abstract

This paper evaluates the impact of foreign remittances on household incomes `and poverty using household data in Pakistan. Employing propensity score matching method, average treatment effects on treated suggest that 
remittances increase per capita income by 45 percent when compared to per capita income of households that do not receive remittances. Poverty results suggest that remittances reduce the probability of households getting under 
poverty line by 30 percent. This percentage is higher for rural households at 36 percent than the urban households at 23 percent. Findings suggest that government should facilitate expatriate Pakistanis in sending remittances to their home country.