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Do Remittances Matter for Poverty Reduction in ASEAN?

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

Abstract


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. https://doi.org/10.15408/sjie.v10i1.19154.


Keywords


poverty; remittances; macroeconomic variables; ASEAN, panel ARDL

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DOI: 10.15408/sjie.v10i1.19154

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