Great Expectations? Remittances and Asset Accumulation in Pakistan

Abstract This study examines asset accumulation patterns of the recipients of foreign and domestic remittances. Employing a number of matching techniques, we analyse stocks of consumer, productive, housing and financial assets among migrants' stay‐behind households in Pakistan. We find that asset accumulation among remittance‐receiving households depends upon the nature and magnitude of remittances, the economic situation, and the geographical location of the recipient households. Foreign remittances lead to a substantial increase in household assets, while no significant change results from domestic remittances. We conclude that foreign remittances are considered as mainly transitory income and are used to generate precautionary savings in cash and kind. Copyright © 2016 John Wiley & Sons, Ltd.

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