The Impact of Remittances on Investment and Poverty in Ghana

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• This paper analyzes the impact of internal remittances (from Ghana) and international remittances (from African or other countries) on investment and poverty in Ghana. The study has three main findings. First, when compared to what they would have spent without the receipt of remittances, households receiving remittances spend less at the margin on one key consumption good: food. Second, households receiving remittances spend more at the margin on three important investment goods: education, housing, and health. Third, the receipt of remittances greatly reduces the likelihood of household poverty. These findings support the growing view that remittances can reduce poverty and increase human and physical capital investment in developing countries.

SummaryThis paper analyzes the impact of internal remittances (from Ghana) and international remittances (from African or other countries) on investment and poverty in Ghana. It has three findings. First, when compared to what they would have spent without the receipt of remittances, households receiving remittances spend less at the margin on food. Second, households receiving remittances spend more at the margin on three investment goods: education, housing, and health. Third, the receipt of remittances greatly reduces likelihood of household poverty. These findings support the growing view that remittances can reduce poverty and increase investment in developing countries.