Effect of Migration on Remittances: Evidence from SAARC Economies

This article quantifies the relationship between remittance inflows and migrant workers in SAARC economies, revealing a significant positive relationship. The analysis indicates that a 1% increase in migration stocks explains an average remittance increase of around 1.1%–1.7% across the region, holding other factors constant. A dynamic model further reinforces these findings by demonstrating that the growth of remittances is influenced by previous levels, confirming the sustained positive impact of net migrant labour on remittance flows. Additionally, country-specific analyses reveal that the long-term relationship between migrant workers and remittances is moderated by the Human Development Index (HDI) levels in each economy. Specifically, improvements in HDI in India and Bangladesh diminish the impact of migrant workers on remittances, while this effect is amplified in Pakistan, Nepal and Sri Lanka.