Health Outcomes of Remittances in Developing Economies: An Empirical Analysis

Abstract

Remittances are playing a vital role in the wellbeing of recipients by enlarging opportunities to a better quality of life, reducing child labor, providing a way to transfer knowledge, and educating about infant health care. Keeping in view the importance of remittances in the life of people, the current study intends to investigate the impact of remittances on child health by using a panel dataset covering 132 countries spanning over 1980 to 2015. Theoretically, the paper is based on Grossman’s (1972) demand for the health model. So, GDP per capita and health expenditures are taken as economic, the number of physicians as social, and access to improved water facilities and urbanization as environmental vectors in the model. To tackle the endogenous nature of remittances, the System Generalized Method of Moments is used. The results show that role of remittances helps to promote child health. Regarding control variables, GDP per capita, the number of physicians, access to improved water facilities, and health expenditures reduce whereas urbanization increases infant mortality. This study suggests that growth in remittances could be used as a policy intervention to improve child health.