Empirical Evidence on the Impact of Remittance on Human Development in South Asia

Abstract

The main objective of this study is to investigate the impact of remittances on human development in the South Asian region. This region has experienced a substantial increase in remittance inflows over the past three decades, which has contributed to strengthening economies and improving human development. The study is based on a panel dataset covering the period from 1996 to 2020. The impact of remittances on human development is empirically examined using standard panel estimation techniques, specifically the fixed effects model. Five different empirical regression models are estimated. The findings reveal that remittances have a positive impact on human development in the South Asian region. Control of corruption also exerts a positive influence on human development, whereas population growth adversely affects it. Furthermore, all independent variables, except urbanization, including remittance inflows, foreign direct investment per capita, labor force participation rate, and control of corruption, demonstrate a favorable effect on human development.