DETERMINANTS OF REMITTANCES IN PAKISTAN: AN EMPIRICAL ANALYSIS OF REMITTANCES FROM SKILLED AND UNSKILLED MIGRANTS

Abstract

Remittances have emerged as a vital player in the balance of Payments of different countries and are pivotal for the stability of the external sector of developing countries such as Pakistan. This study analyses the macroeconomic determinants of remittances as well as the comparative remittances of skilled and unskilled workers to draw a clearer picture of the current state and composition of the remittances. The study makes use of Johansen’s co-integration technique to check for the existence of long run liaison among the variables. The study finds that remittances are positively and negatively affected by unskilled and skilled migration respectively. The macroeconomic variables included in the model are also found to be significant factors determining the flow of remittances to Pakistan.