Analysis of Impact of Remittance on Poverty in Nigeria

PEP Working Paper serie No. 2012-09

34 Pages Posted: 18 May 2018 Last revised: 12 Jul 2018

See all articles by Nnaemeka Andegbe Chukwuone

Nnaemeka Andegbe Chukwuone

University of Nigeria

Ebele Amaechina

University of Nigeria - Department of Economics

Sunday Emeka Enebeli-Uzor

Zenith Bank Plc.

Evelyn Iyoko

Novena University - Department of Economics

Benjamin Okpukpara

University of Nigeria - Department of Economics

Date Written: October 1, 2012

Abstract

This study analyzes the impact of remittances on poverty in Nigeria. The Nigerian National Living Standard Survey 2004 data was used. The paper used multinomial logit model with instrumental variables and propensity score matching (PSM) method to estimate the impact of remittances on poverty. The use of these methods was based on two reasons. The first is to control for the problems of selectivity and endogeneity. The second is the fact that the implicit hypothesis of estimating the expenditures of the counterfactual group, as done in some previous studies, is in similarity between the group that receives remittances (treated) and the other that does not (untreated). The study finds that both internal and international remittances reduce the incidence, depth and severity of poverty. The statistical tests show a significant Average Treatment Effect on the Treated (ATT), due to internal and external remittances. The receipt of internal remittances reduces the poverty headcount by 11.14% and poverty gap by 9.7% while the receipt of international remittances makes poverty indices almost nil.

Keywords: Remittances, Poverty, Instrumental Variable, Propensity Score Matching, Nigeria

JEL Classification: D63, I31, I32, O15, P46

Suggested Citation

Chukwuone, Nnaemeka Andegbe and Amaechina, Ebele and Enebeli-Uzor, Sunday Emeka and Iyoko, Evelyn and Okpukpara, Benjamin, Analysis of Impact of Remittance on Poverty in Nigeria (October 1, 2012). PEP Working Paper serie No. 2012-09. Available at SSRN: https://ssrn.com/abstract=2367404 or http://dx.doi.org/10.2139/ssrn.2367404

Nnaemeka Andegbe Chukwuone (Contact Author)

University of Nigeria ( email )

184 ogui Road Enugu
Nsukka, Enugu State 410001
Nigeria

Ebele Amaechina

University of Nigeria - Department of Economics ( email )

Department of Economics,
University of Nigeria Nsukka
Nsukka, Enugu State 4100002
Nigeria

Sunday Emeka Enebeli-Uzor

Zenith Bank Plc. ( email )

Lagos
Nigeria

Evelyn Iyoko

Novena University - Department of Economics ( email )

Kwale
Nigeria

Benjamin Okpukpara

University of Nigeria - Department of Economics ( email )

Department of Economics,
University of Nigeria Nsukka
Nsukka, Enugu State 4100002
Nigeria

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