Exploring Remittances Impact on Poverty Alleviation and Deepening: Remittances from International Migration

This paper explores whether remittances from international migration alleviate or deepen nation’s poverty. The study is relevant due to ongoing concerns about migrants’ brain drains and brain gains debate. And inequality among remittances recipient households and remittances non-recipient households. Grounded in Lee’s push and pull theory, which considers poverty as a push factor and trigger migration; in return migrants contribute remittances to origin. The paper employs literature review approach also known as a ‘meta-study’. The study’s findings reveal that remittances are one of a catalyst for economic growth for nation’s poverty alleviation. However, this depends on how remittances are spent. Remittances spent on conspicuous consumption instead of investment and developmental projects deepen inequality between remittances recipient households and remittances non-recipient households. Remittances spent on developmental projects expand the economy. This leads to job creation, unemployment reduction, decreases inflation, and improve balance of payment. Further, value-chain employment is created in transport, housing, and services sectors. It enhances economic growth which improves citizens living standard. The paper argues that remittance could alleviate or deepen poverty depends on the manner it is spent. Therefore, the paper recommends massive education to create awareness about remittances spending on developmental projects instead on conspicuous consumption to spur the economy. Since, authorities cannot determine how remittance is spent by the recipients, luxury goods should ‘attract’ high taxes, which would increase state’s revenue and discouraged conspicuous consumption. And less taxes on developmental projects to encourage remittances spending on them to stimulate the economy.