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Abstract
This study examines the costs and household-level benefits of overseas migration in Toba Tek Singh, Pakistan. A household survey was conducted to assess the transaction costs associated with the transfer of remittances and the sources used to finance overseas migration. We also carry out a propensity-score matching exercise, which reveals that overseas migration has substantial benefits as measured by migrants' consumption levels, their expenditures on health, education, and vehicles, and the level of household savings. Policy options to facilitate migration and the transfer of remittances include (i) establishing technical training institutions to help workers upgrade their skills, (ii) information campaigns on the migration process and opportunities available, (iii) setting up institutions to provide loans for potential migrants, (iv) reducing money transfer costs through formal channels, and (v) building awareness of the Pakistan Remittance Initiative.
Keywords: International migration, remittances, Pakistan.
JEL classification: I30, F22, F24.
(ProQuest: ... denotes formulae omitted.)
1. Introduction
The role of international migration and remittances in poverty reduction and economic growth is a key issue for most labor-sending countries. Remittances are often an important source of income and help boost growth, particularly in developing countries (Alfieri & Havinga, 2006).
The United Nations News Centre (2013) indicates that 232 million people in the world live outside their country of birth compared with 175 million in 2000 and 154 million in 1990. The World Bank (2015) reports that international migrants numbered about 247 million in 2013; this is projected to increase by another 3 million in 2015. The remittances received by developing countries are three times the size of official development assistance. World Bank estimates show that, globally, remittances totaled US$ 583 billion in 2014, of which US$ 436 billion flowed to developing countries. In 2013, worldwide remittances stood at about US$ 542 billion, of which developing countries accounted for US$ 414 billion. The top four recipient countries included India (US$ 70 billion), China (US$ 60 billion), the Philippines (US$ 25 billion), and Mexico (US$ 22 billion). By 2016, worldwide remittances are projected to reach US$ 700 billion, with developing countries receiving about US$ 540 billion.
In 2013, Pakistan ranked seventh among the top ten countries receiving migrant remittances in the developing world (US$ 14.6 billion). So, Pakistani expatriates play a vital...