The impact of migration and remittances on household poverty in Afghanistan: a micro level analysis

Abstract

Migration is a widespread phenomenon that has been present since the earliest existence of humans. Individuals relocate for various reasons, but the primary motivation for moving is typically to enhance their own living conditions as well as those of family members who remain behind. Migration has been a longstanding phenomenon in Afghanistan, significantly intensifying over the past decade. This research aims to explore the effects of migration and remittances on household poverty by employing various methodologies, including the Foster-Greer-Thorbecke (FGT) poverty indices, Ordinary Least Squares (OLS), and Logit models. The analysis utilizes data from the Afghanistan Living Condition Survey (ALCS) 2016-17, encompassing 19,838 households and 155,680 individuals nationwide. Findings from the Logit and OLS models reveal that migration and remittances significantly mitigate household poverty, as well as reduce the poverty gap and the squared poverty gap. Additionally, the results reveal that socio-economic characteristics of the household may positively or negatively impact poverty indicators as well. These relationships highlight the complex dynamics between demographics and poverty status. Examining poverty indicators in Afghanistan, the study revealed alarmingly high rates: 87.3% poverty rate, 49.2% poverty gap, and 32.2% poverty gap square. Moreover, the study found that household with migrant members have lower poverty indicators: 83.9% poverty rate, 44.3% poverty gap, and 27.9% poverty gap square, compared to households without migrant member with 89% poverty rate and 51.5% poverty gap, and 34.1% poverty gap square. Importantly, the study found that poverty indicators observed more among rural and Kuchi households compared to rural households. Independent sample t-tests also confirmed statistically significant differences in poverty indicators between urban and rural households, as well as between urban and Kuchi households, at a 1% significance level. Finally, since migration and remittances have a significant negative impact on poverty in Afghanistan, the study emphasizes the need for effective policies, improved governance, and international support to manage migration and address the persistent issue of poverty. Thus, based on the results of the study a few policies are recommended for the Afghan government and other stakeholders that are involve in these issues and interested to find a solution.