Paper
Remittances, Income Distribution, and Rural Asset Accumulation
Do remmitances have a positive effect on land and capital accumulation?
42 pages
This paper examines the direct, first-rounds impact of internal and external remittances on income distribution and asset accumulation in rural Pakistan. Using income decomposition techniques on a three year panel household data set, the paper finds that:
- Internal remittances have a positive effect on equity;
- External remittances have a negative effect.
The study also uses an asset-accumulation model to pinpoint the effect of remittances on five types of rural assets: irrigated land owned, rainfed land owned, livestock assets, agricultural capital, and nonfarm assets. The results show that:
- Remittances do have an effect on rural asset accumulation;
- External remittances have a positive and significant effect on the accumulation of land;
- Internal remittances have a positive and significant effect on the accumulation of agricultural capital.
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