The impact of remittance inflows on economic growth, unemployment and income inequality: An international evidence

Pal, Shreya; Villanthenkodath, Muhammed Ashiq; Patel, Gupteswar; Mahalik, Mantu Kumar

doi:10.1007/s42495-021-00074-1

Cited by 34 publications

(19 citation statements)

References 53 publications

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“…The selection of years was dictated by the availability of data for all the variables, particularly the energy structure data, which is available only up to 2014 in the World Development Indicators. The data were converted into the natural logarithm for the empirical analysis by the following studies (Pal et al 2021 ; Sahoo et al 2021 ; Villanthenkodath and Arakkal 2020 ; Villanthenkodath and Mushtaq 2021 ; Ansari and Villanthenkodath 2021 ; Villanthenkodath and Mahalik 2021 ).…”

Section: Theoretical Model Data Description and Econometric Methodologymentioning

confidence: 99%

Impact of Economic Structure on the Environmental Kuznets Curve (EKC) hypothesis in India

Villanthenkodath

Gupta

Saini

et al. 2021

Economic Structures

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This study aims to evaluate the impact of economic structure on the Environmental Kuznets Curve (EKC) in India. The present study deviates from the bulk of study in the literature with the incorporation of both aggregated and disaggregated measures of economic development on the environmental degradation function. For the empirical analysis, the study employed the Auto-Regressive Distributed Lag (ARDL) bounds testing approach of cointegration to analyse the long-run and short-run relationship during 1971–2014. Further, the direction of the causality is investigated through the Wald test approach. The results revealed that the conventional EKC hypothesis does not hold in India in both aggregated and disaggregated models since economic growth and its component have a U-shaped impact on the environmental quality in India. However, the effect of population on environmental quality is positive but not significant in the aggregated model. Whereas, in the disaggregated model, it is significantly affecting environmental quality. Hence, it is possible to infer that the population of the country increases, the demand for energy consumption increase tremendously, particularly consumption of fossil fuel like coal, oil, and natural gas, and is also evident from the energy structure coefficient from both models. This increase is due to the scarcity of renewable energy for meeting the needs of people. On the contrary, urbanization reduces environmental degradation, which may be due to improved living conditions in terms of efficient infrastructure and energy efficiency in the urban area leading to a negative relation between urbanization and environmental degradation.

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Section: Theoretical Model Data Description and Econometric Methodologymentioning

confidence: 99%

Impact of Economic Structure on the Environmental Kuznets Curve (EKC) hypothesis in India

Villanthenkodath

Gupta

Saini

et al. 2021

Economic Structures

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“…Although a plethora of prior contributions suggest that remittances can boost economic growth (see Fayissa & Nsiah, 2010;Kumar, 2013;Nyamongo, et al, 2012;Olubiyi, 2014), there are also the concerns that it heightens income inequality in the developing world (see Pal et al, 2021;Song et al, 2021;Shen et al, 2010). It is in this regard that this study pays attention to the role of financial development 5 in moderating the remittances-inequality relationship.…”

Section: Introductionmentioning

confidence: 92%

“…Abduvaliew and Bustillo (2019), Mamun et al (2015), Anyanwu (2011) and Koechlin and Leon (2007), studies such as Song et al (2021), Pal et al (2021), Shen et al (2010) and (World Bank, 2021) report the contrary.…”

Section: Theoretical and Empirical Literature Survey: Remittances And...mentioning

confidence: 99%

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Remittances and Income Inequality in Africa: Financial Development Thresholds for Economic Policy

Ofori

Gbolonyo

Dossou

et al. 2022

Preprint

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The study employs macrodata on 42 African countries to examine whether remittances and financial development (including the sub-components of access, depth and efficiency) contribute to the equalisation of incomes across the continent. Robust evidence from the dynamic GMM estimator shows that: (i) remittances heighten income inequality in Africa, (ii) Africa’s financial system is not potent enough for repacking remittances towards the equalisation of incomes, and (iii) vis-à-vis financial access and depth, inefficiencies characterising Africa’s financial institution is the main reason remittances contribute to the widening of the income disparity gap. Nonetheless, the optimism which we provide by way of threshold analysis shows that channelling efforts into the development of Africa’s financial sector could yield shared income distribution dividends. In particular, efforts should be made to achieve a minimum of 23.05 per cent of financial access, and 3.02 per cent for that of efficiency of financial institutions if Africa’s financial sector is to repackage external finance towards the equalisation of incomes. A few policy recommendations are provided in the end.JEL Codes: F22, F24, G21, I3, N37, O11, O55

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“…The period of inquiry was selected based on data availability for the Indian case. However, all the obtained data has been converted to the natural log for estimation to avoid the heterogeneity by following (Ansari et al, 2022;Pal et al, 2022;Shameem P et al, 2022;Villanthenkodath, Ansari, et al, 2022;Villanthenkodath & Mohammed, 2022). The data obtained from different sources are reported in Table 1 with their detailed definitions.…”

Section: Model Construction Data and Estimation Strategymentioning

confidence: 99%

Does real interest rate reduce income inequality in India? Evidence from multivariate framework analysis.

Villanthenkodath

Mahalik²

2022

Eur J Gov Econ

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This study empirically examines the impact of real interest rate on income inequality in India within a Kuznets Curve framework considering the role of economic growth, trade openness and technological innovation as the control variables. This study employs the ARDL bounds test for validating the long-run relationship over the annual data period 1995 to 2019. The results reveal the long-run relationship between the series in India. The findings suggest that the initial increase in interest rate significantly reduces income inequality. But, in a later stage, a threshold exists for such an increased interest rate to revert the prior beneficial impact. This finding further shows that Kuznets’ inverted U-shaped hypothesis is not valid for the relationship between income inequality and real interest rate in India. It shows that the real interest rate impedes income distribution in the long run. These findings are also found to be robust using FMOLS and DOLS estimators. We find that economic growth significantly reduces income inequality, whereas trade openness promotes it. Surprisingly, technological innovation enhances income inequality, but this effect vanishes in the long-run. However, these findings suggest that policymakers in India should not ignore the impeding role of real interest rates while aiming at achieving effective income distribution between haves and have-nots in the long run.

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The impact of remittance inflows on economic growth, unemployment and income inequality: An international evidence

Cited by 34 publications

References 53 publications

Impact of Economic Structure on the Environmental Kuznets Curve (EKC) hypothesis in India

Impact of Economic Structure on the Environmental Kuznets Curve (EKC) hypothesis in India

Remittances and Income Inequality in Africa: Financial Development Thresholds for Economic Policy

Does real interest rate reduce income inequality in India? Evidence from multivariate framework analysis.

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