Migration and Poverty

Running head : Migration and Poverty

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Migration and Poverty

Migration and the associated remittances make a difference to poverty because the number of people who migrate from a country and go to work in other countries send money to their respective countries . Such remittances reduce the poverty levels of the senders ' relatives and contacts back home (Oishi , 2005 , pp . 10 . Remittances also increase the average household income in a nation , thus making the citizens to live above the poverty . The poverty rates of

a nation are thus minimized (Khawaja , 2003 , pp . 33 . When used in the nation , the remittances can alleviate poverty levels since the money is used to purchase products made in the nation . Such funds can thus benefit the local producers who may lack a ready market for their goods (Rodrik , D 2002

The major stumbling blocks of remittances are that it can lead to inflation within the respective country , thus negatively impacting on the exchange and interest rates . This is because the rates depend on the amount of remittance coming into a country (Taylor , 1992 pp . 200 Remittances also affect the economic growth rate of a country since it provides money for the basic requirements of the citizens . The citizens working capacity is thus reduced for they can access their basic requirements without working . In turn , the country 's Gross Domestic Product is minimized , a situation that reduces the nation ' income (Jones , 1998 . Remittances can affect the household migration , thus affecting the country...