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Impact of International Remittance on Rural Household Asset Building: The Case of Mirab Soro Woreda, Hadiya Zone, Central Ethiopia

Author

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  • Yisihak Ergicho Ababbo
  • Dawit Dafar

Abstract

Purpose: The main objective of this study was to assess the impact of international remittances on rural household asset building. Design/Methodology/Approach: This study was used primary household survey data collected from three major rural kebeles of Mirab Soro Woreda from Hadiya Zone, Central Ethiopia Region, Ethiopia. Both primary and secondary sources of data were used. The collected data were analyzed by both descriptive and econometric analysis; using propensity score matching model. The total of sample households were selected from receiver of remittances and non-receivers of remittances 146 and 186 respectively. Findings: The result of this study finds that international remittances substantially increase the level of asset building and decrease future rural household vulnerability. As the result revealed on average about 52.7% of recipient household’s total capital asset were greater than non-recipients and recipients have more cost on children schooling than non-recipients. The household asset positively influenced by tropical livestock, saving, investment, and income and negatively influenced by farm land size housing, consumption and child education. The estimated result of ATT that remittances has brought a positive and significant impact on total capital of household asset and child education expenses. The study concluded that remittance has positive impact on rural household asset building. Practical Implications: The government should develop policies that encourage the inflow of remittances; such as providing better and relatively cheap means of transferring remittance, and developing an appropriate regulatory framework and monitoring mechanism on flow of remittances. Originality/Value: International remittances recipient of rural households builds more assets than non-recipient households.

Suggested Citation

  • Yisihak Ergicho Ababbo & Dawit Dafar, 2024. "Impact of International Remittance on Rural Household Asset Building: The Case of Mirab Soro Woreda, Hadiya Zone, Central Ethiopia," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 14(2), pages 131-175.
    • Handle: RePEc:ers:ijfirm:v:14:y:2024:i:2:p:131-175
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    More about this item

    Keywords

    International remittances; asset building; child education; housing; PSM and Impact.;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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