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The impact of remittances and migration on poverty reduction: a case study of Tanzania
(University of Dar es Salaam, 2007) Olal, Augustine K.H.
Workers’ remittances constitute an increasingly important mechanism for the transfer of resources from developed to developing countries like Tanzania. These remittances flow are essential in economic growth and poverty reduction. The focus of this study is thus on determining how important remittances are and their impact on poverty reduction. It also reviews the literature on the impact of remittances on poverty focusing specifically on the remittances trend and its impact on poverty reduction. The study is carried out using Ordinary Least Square (OLS) method. The result of the study shows that increase in remittances has an impact on poverty by reducing its extent as already evidenced by both theoretical and empirical studies. In the regression carried the remittance variable was significant as well as with the gin coefficient and these two supports our hypothesis. Unofficial remittances flow is bigger than the reported figures. At the same time GDP growth rate has increased under the period of study compared to remittances flow which either remained the same or went down. Several policy implications emerge from the study. In view of the current economic situation where the economic growth and poverty reduction is the top agenda, remittances flows needs be encouraged.