Master of Science in Economics

Faculty / School

School of Economics and Social Sciences (SESS)


Department of Economics

Date of Submission



Dr. Abbas Ali Gillani, Institute of Business Administration, Karachi

Project Type

MSECO Research Project

Access Type

Restricted Access


This study investigates the impact of remittances on household welfare by using nationally representative household survey namely Pakistan Household Integrated Economic Survey (HIES) 2015-16. To address the issue of selection bias in studies related to remittances, I have used Propensity Score Matching (PSM) which enables to create a counterfactual group to compare between groups receiving treatment and not receiving treatment. Three types of remittances are considered: total, internal and international. The paper also explores any rural-urban differences on impact of remittances. Empirical findings suggest that total and international remittances, on average, increase the per capita annual expenditure of households by Rs. 15,190 and Rs.26,296 respectively than that of non-recipient households. Internal remittances have an insignificant effect on per capita annual expenditure. However, when rural-urban breakup is done, we find internal remittances have a positive and significant impact on per capita annual expenditure of rural households compared to urban households. The results also capture a higher gain in per capita annual expenditure for rural households than urban households for internal remittances.


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