Dynamic Impact of Remittances on Poverty, Inequality, Human Development and Financial Development: Empirical evidence from Asian countries

This study examines the dynamic and nonlinear effects of remittances on poverty, income inequality, human development, and financial development across 37 Asian countries from 1990 to 2022. Using System-GMM and panel quantile regression techniques, the study addresses endogeneity, heterogeneity, and distributional differences. The findings show that remittances significantly promote financial and human development by improving access to education, healthcare, and formal financial services. However, its effects on poverty and inequality are nonlinear and heterogeneous. Remittances initially reduce poverty and overall inequality, but their marginal developmental benefits weaken beyond a threshold, providing partial support for the Remittance Kuznets Hypothesis. While remittances increase inequality among lower-income groups, they reduce inequality at higher income levels. The results further reveal that stronger institutional quality enhances the developmental impact of remittances. Overall, the study underscores the importance of effective governance, financial inclusion, and migration policies in maximizing the developmental benefits of remittances in Asian economies.