An economic impact of remittances in rural economy

The rationale of this research study was to estimate the socio-economic impacts of remittances on the left behind households in district Sialkot. This research paper focused on the direct, first-order effects of remittances at household level. The study is based on the primary data. Data collection tool for the study was the survey method. The data was collected from 88 respondents in the rural areas. The most of the respondents were the migrants' brothers. The major destinations of the overseas migrants were the Saudi Arabia, Greece, Dubai, Kuwait, Oman and Italy. Low income has exposed as a major reason for more than 45%, for overseas migration. The most of the overseas migrants (38%) had attained middle level of education at the time of migration. The major occupations abroad were the daily wage laborers. There was mix trend about the received remittances. Around 52% of the households received on an average up to Rs.20,000 and about 41% received Rs.20,001-40,000 on per month basis. Descriptive Statistics and Regression models were also used for data analysis. All variables included in the model were highly significant. Adjusted R Square was 0.54, which indicated that independent variables included in the model explained about 54% of the total variation in the dependent variable. The findings regarding remittances use patterns revealed that the migrants' left behind households used the major portion of the remittance on household consumption, house construction/improvement, purchase of luxuries etc; but a relatively small portion of the remittances was used in productive investment (like agriculture land, livestock etc.). It is suggested that the Government should develop a policy to encourage the migrants' households to use remittances in productive activities such as the establishment of small industrial units, small businesses etc. so that the unemployed children of migrants should be encouraged to join such centers to utilize their talents and earn their income.