TY - JOUR
T1 - Inter-linkages between remittance and savings in Ghana
AU - Quartey, Peter
AU - Ackah, Charles
AU - Lambon-Quayefio, Monica Puoma
N1 - Publisher Copyright:
© 2019, Emerald Publishing Limited.
PY - 2019/1/7
Y1 - 2019/1/7
N2 - Purpose: The increase in volumes and circulation of internal and international remittances have become a substantial part of resource flow for economic development especially in developing countries with a significant impact on household welfare. The purpose of this paper is to examine the relationship between remittances and savings mobilization. Design/methodology/approach: Using the most recent wave of the Ghana Living Standard Survey data, the study accounts for the endogeneity in remittance receipts by employing treatment effect estimators, in addition to a probit model to establish the relationship between remittances and likelihood of savings. Findings: The results suggest that receiving remittances significantly affects household’s propensity to save. Households that receive international remittances seem to have a slightly higher probability of savings compared to households that receive only domestic remittances. Originality/value: From the literature, whereas the theoretical relationship between savings and remittances is mixed, it is also evident that the empirical relationship between remittances and savings has not been clearly established, especially in sub-Saharan African countries in general and Ghana in particular. The present study adds to the paucity in the literature in two main ways. First, the study provides empirical evidence on the relationship between remittances and savings by not only focusing on international remittances but also on internal remittances. Second, in sharp departure from other studies, the current study employs more robust empirical estimators in estimating the relationship between remittances and savings.
AB - Purpose: The increase in volumes and circulation of internal and international remittances have become a substantial part of resource flow for economic development especially in developing countries with a significant impact on household welfare. The purpose of this paper is to examine the relationship between remittances and savings mobilization. Design/methodology/approach: Using the most recent wave of the Ghana Living Standard Survey data, the study accounts for the endogeneity in remittance receipts by employing treatment effect estimators, in addition to a probit model to establish the relationship between remittances and likelihood of savings. Findings: The results suggest that receiving remittances significantly affects household’s propensity to save. Households that receive international remittances seem to have a slightly higher probability of savings compared to households that receive only domestic remittances. Originality/value: From the literature, whereas the theoretical relationship between savings and remittances is mixed, it is also evident that the empirical relationship between remittances and savings has not been clearly established, especially in sub-Saharan African countries in general and Ghana in particular. The present study adds to the paucity in the literature in two main ways. First, the study provides empirical evidence on the relationship between remittances and savings by not only focusing on international remittances but also on internal remittances. Second, in sharp departure from other studies, the current study employs more robust empirical estimators in estimating the relationship between remittances and savings.
KW - Remittances
KW - Savings
KW - Treatment effect
UR - http://www.scopus.com/inward/record.url?scp=85052593670&partnerID=8YFLogxK
U2 - 10.1108/IJSE-12-2017-0618
DO - 10.1108/IJSE-12-2017-0618
M3 - Article
AN - SCOPUS:85052593670
SN - 0306-8293
VL - 46
SP - 152
EP - 166
JO - International Journal of Social Economics
JF - International Journal of Social Economics
IS - 1
ER -