Do Remittances Matter for Poverty Reduction in ASEAN?

Taufiq Fahrizal, Aliasuddin Aliasuddin, M. Shabri Abd. Majid


This study examined the influence of remittances and macro-economic variables on poverty in ASEAN-4 countries (i.e., Indonesia, Malaysia, Thailand, and the Philippines) over the 1991 to 2019 period using a panel Autoregressive Distributed Lag (ARDL) model. The study documented that remittance and unemployment have a significant effect on poverty reduction in the long run. Meanwhile, economic growth and the Gini coefficient were found to have an insignificant influence on poverty reduction. The speed of adjustment due to shocks in the short term is restored within eight months into the long-run equilibrium. Our results emphasize that poverty in ASEAN-4 must be addressed with pragmatic macroeconomic policies, especially policies that affect the poor's income. Besides, with the real contribution of remittances, the strengthening of international cooperation related to migrant workers is also essential to alleviate poverty.

JEL Classification: F22, F24, I32, J01, O15

How to Cite:

Fahrizal, T., Aliasuddin., & Majid, M. S. A. (2021). Do Remittances Matter for Poverty Reduction in ASEAN?. Signifikan: Jurnal Ilmu Ekonomi, 10(1), 13-30.


poverty; remittances; macroeconomic variables; ASEAN, panel ARDL


Acosta, P. A., Lartey, E. K., & Mandelman, F. S. (2009). Remittances and the Dutch Disease. Journal of International Economics, 79(1), 102-116.

Adams, Jr, R. H., & Cuecuecha, A. (2013). The Impact of Remittances on Investment and Poverty in Ghana. World Development, 50, 24-40.

Airola, J. (2007). The Use of Remittance Income in Mexico. International Migration Review, 41(4), 850–859.

Amuedo-Dorantes, C., & Pozo, S. (2004). Worker’s Remittances and the Real Exchange Rate: Paradox of Gifts. World Development, 32(8), 1407–1417.

Azam, M., Haseeb, M., & Samsudin, S. (2016). The Impact of Foreign Remittances on Poverty Alleviation: Global Evidence. Economics & Sociology, 9(1), 264-281.

Banga, R., & Sahu, P. K. (2010). Impact of Remittances on Poverty in Developing Countries. Working Papers, 2872.

Brückner, M., & Lederman, D. (2015). Effects of Income Inequality on Aggregate Output. Washington: World Bank.

Chaudhry, I. S., & Imran, F. (2013). Does Trade Liberalization Reduce Poverty and Inequality? Empirical Evidence from Pakistan. Pakistan Journal of Commerce and Social Sciences (PJCSS), 7(3), 569-587.

Cheema, A. R., & Sial, M. H. (2012). Poverty, Income Inequality, and Growth in Pakistan: A Pooled Regression Analysis. Lahore Journal of Economics, 17(2), 137-157.

Cook, S., & Pincus, J. (2014). Poverty, Inequality and Social Protection in Southeast Asia: An Introduction. Journal of Southeast Asian Economies, 31(1), 1-17.

Dewi, S., Majid, M. S. A., Aliasuddin, A, & Kassim, S. (2018). Dynamics of Financial Development, Economic Growth, and Poverty Alleviation: The Indonesian Experience. Southeast European Journal of Economics and Business, 13(1), 17-30.

Gani, A. (2016). Remittances and Savings in Asia: Some Empirical Evidence Based on The Life-cycle Model. Journal of Finance and Economics, 4(1), 24-38.

Hassan, S. A., Zaman, K., & Gul, S. (2015). The Relationship Between the Growth-Inequality-Poverty Triangle and Environmental Degradation: Unveiling the reality. Arab Economic and Business Journal, 10(1), 57-71.

Henly, J. R., Danziger, S. K., & Ofer, S. (2005). The Contribution of Social Support to the Material Well-being of Low-income Families. Journal of Marriage and Family, 67(1), 122–140.

Imai, K. S., Gaiha, R., Ali, A., & Kaicker, N. (2014). Remittances, Growth, and Poverty: New Evidence from Asian Countries. Journal of Policy Modeling, 36(3), 524-538.

Intal, J. P., & Chen, L. (2017). ASEAN and the Member States: Transformation and Integration. Singapore: Economic Research Institute for ASEAN and East Asia.

Kao, C. (1999). Spurious Regression and Residual-based Tests for Cointegration in Panel Data. Journal of Econometrics, 90(1), 1-44.

Karim, B. A., & Majid, M. S. A. (2010). Does Trade Matter for Stock Market Integration?. Studies in Economics and Finance, 27(1), 47-66.

Lacroix, T. (2011). Migration, Rural Development, Poverty, and Food Security: A Comparative Perspective (UOIMI Working Papers). Oxford: University of Oxford International Migration Institute.

Lokshin, M., Bontch-Osmolovski, M., & Glinskaya, E. (2010). Work-related Migration and Poverty Reduction in Nepal. Review of Development Economics, 14(2), 323-332.

Majid, M. S. A., Dewi, S., Aliasuddin, A., & Kassim, S. H. (2019). Does financial Development Reduce Poverty? Empirical Evidence from Indonesia. Journal of the Knowledge Economy, 10(3), 1019-1036.

Mankiw, N. G. (2013). Macroeconomics. 8th edition. Duffield, UK: Worth Publishers.

Martin, P. L., & Zürcher, G. (2008). Managing Migration: The Global Challenge (Vol. 63, No. 1). Washington, DC: Population Reference Bureau.

Masron, T. A., & Subramaniam, Y. (2019). Does Poverty Cause Environmental Degradation? Evidence from Developing Countries. Journal of Poverty, 23(1), 44-64.

Mukherjee, S., & Benson, T. (2003). The Determinants of Poverty in Malawi, 1998. World Development, 31(2), 339–358.

Mulok, D., Kogid, M., Asid, R., & Lily, J. (2012). Is Economic Growth Sufficient for Poverty Alleviation? Empirical Evidence from Malaysia. Cuadernos de Economía, 35(97), 26-32.

Munir, R., Sial, M. H., Sarwar, G., & Shaheen, S. (2011). Effect of Workers' Remittances on Private Savings Behavior in Pakistan. Asian Economic and Financial Review, 1(3), 95-103.

Musakwa, M. T., & Odhiambo, N. M. (2019). The Impact of Remittance Inflows on Poverty in Botswana: An ARDL Approach. Journal of Economic Structures, 8(1), 42-57.

Nahar, F. H., & Arshad, M. N. M. (2017). Effects of Remittances on Poverty Reduction: the Case of Indonesia. Journal of Indonesian Economy and Business, 32(3), 163-177.

Nansadiqa, L., Masbar, R., & Majid, M. S. A. (2019). Does Economic Growth Matter for Poverty Reduction in Indonesia?. East African Scholars Journal of Economics, Business, and Management, 2(2), 46-52.

Osaki, K. (2003). Migrant Remittances in Thailand: Economic Necessity or The Social Norm? Journal of Population Research, 20(2), 203-222.

Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds Testing Approaches to The Analysis of Level Relationships. Journal of Applied Econometrics, 16(3), 289-326.

Peterson, E. W. F. (2017). Is Economic Inequality a Problem? A Review of The Arguments. Social Sciences, 6(4), 1-25.

Rahman, M. A. (2013). Household Characteristics and Poverty: A Logistic Regression Analysis. The Journal of Developing Areas, 47(1), 303–317.

Rupasingha, A., & Goetz, S. J. (2007). Social and Political Forces as Determinants of Poverty: A Spatial Analysis. The Journal of Socio-Economics, 36(4), 650–671.

Sabir, H. M., & Tahir, S. H. (2012). The Impact of Different Macroeconomic Variables on Poverty in Pakistan. Interdisciplinary Journal of Contemporary Research in Business, 3(10), 788-799.

Sasmal, R., & Sasmal, J. (2016). Public Expenditure, Economic Growth, and Poverty Alleviation. International Journal of Social Economics, 43(6), 604-618.

Siyan, P., Adegoriola, A. E., & Adolphus, J. A. (2016). Unemployment and Inflation: Implication on Poverty Level in Nigeria. MPRA Paper No. 79765.

Vacaflores, D. E. (2018). Are Remittances Helping Lower Poverty and Inequality Levels in Latin America? The Quarterly Review of Economics and Finance, 68, 254-265.

Wagle, U. R., & Devkota, S. (2018). The Impact of Foreign Remittances on Poverty in Nepal: A Panel Study of Household Survey Data, 1996–2011. World Development, 110, 38-50.

Weaver, R. D. (2012). Social Capital and Its Role in Poverty Reduction: A Canadian-based Analysis. Journal of Comparative Social Welfare, 28(1), 57–74.

World Bank. (2018). Climbing the Ladder: Poverty Reduction and Shared Prosperity in Vietnam. detail/206981522843253122/climbing-the-ladder-poverty-reduction-and-shared-prosperity-in-vietnam

World Bank. (2020). Migration and Remittances. Retrieved August 4, 2020, from

World Bank. (2020). World Bank Open Data. Retrieved August 4, 2020, from

Full Text: PDF

DOI: 10.15408/sjie.v10i1.19154


  • There are currently no refbacks.