An Empirical Evidence on Impact of remittance on Human Development in South Asian

Abstract

The main objective of this study is to investigate the impact of remittances on human development in the South Asian region, which have larger remittance inflows as this region has seen a significant rise in foreign inflows over the previous three decades, which helped to strengthen their economies and enhance human development. The current study is based on a panel data set of South Asian economies over the period of 1996 to 2020. The impact of remittance on human development is empirically tested by employing the standard panel estimation techniques that are fixed or random effect model. Further, the Hausman test is use to choose between the fixed and random effect model. The impact of remittance on human development is investigated by carrying out comprehensive empirical regressions. Five different versions of empirical regressions are estimated to trace the impact of remittance on human development by employing fixed effect model. The empirical findings indicate a positive and significant impact of remittance inflows on human development in the South Asian region. The effect of remittance on human development is positive in almost all versions of the empirical models which imply that the importance of remittance inflows cannot be denied for human development and for improving social and economic condition of the region. The result further shows that control of corruption also have significant and positive impact on human development, however, increase in population adversely affect human development. In general, all independent variables such as remittance inflows, GDP per capita, foreign direct investment, labor force participation rate and control of corruption shows have a favorable human development except urbanization, which is positive and insignificant