Authors:

Abstract

There is a continuing debate over the impacts of migration on the developing nations despite the ever-increasing size of internal and international remittances. Moreover, a little attention has been paid to analyze the impact of these financial transfers on poverty and inequality of those countries. This study, using a nationally representative sample, assessed the impacts of migration and remittances on poverty and inequality of estate sector households of Sri Lanka. A multinomial logit-ordinary least squares two-stage selection control model and a simulation analysis were used to estimate the impact of migration and remittances on poverty and inequality. Results reveal that internal and international remittances reduce poverty incidence by 2.14% and 2.32%, depth of poverty by 1.33% and 0.98%, and severity of poverty by 0.63% and 0.48%, respectively. Results further suggest that income inequality slightly decreased due to internal and international remittances. Moreover, the findings support a growing view in the literature that migration is a livelihood strategy and it helps in alleviating poverty.

Keywords: Estate sector ,   Inequality ,   Migration ,   Poverty ,   Remittances  

How to Cite: Dharmadasa, R.A.P.I.S., Weerahewa, J. and Samarathunga, P.A., 2018. Labor migration and impact of remittances on poverty and income inequality: evidence from estate sector of Sri Lanka. Tropical Agricultural Research, 30(1), pp.69–83. DOI: http://doi.org/10.4038/tar.v30i1.8279