Migration, Remittance and Poverty Dynamics in Rural India: Evidence from Longitudinal Survey

Abstract

As rural poverty continues to pose fundamental challenges in the development process, this study aims to examine the role of remittance in influencing poverty dynamics among rural households. For this, we employed instrumental variable technique and utilized longitudinal data of India Human Development Survey. After correcting for endogeneity bias results obtained from our econometric analysis reinforce the urgent need to focus on poverty transition in rural households and highlight the positive and significant role of the amount and frequency of remittances in alleviating poverty. Additionally, access to credit, government subsidies, and educational attainment substantially improves rural households’ economic condition and helps them to escape poverty. Education can be a magical tool to deal with poverty, so there is need to restore the quality of education in rural areas. Thus, in order to achieve poverty elimination goal, there is a need to integrate migration and poverty while considering policy measures. Given the importance of amount and frequency of remittances in poor households, it is imperative from policy perspective to focus upon the channels of smoothing the flow of external finance and make it more sustainable.