The Impacts of Foreign Remittances on Health Expenditures in Pakistan

Abstract

This study explores the relationships between health expenditures and foreign remittances by using the HIES (nine) data sets for the period from 1998-99 to 2018-19, using the pooled data consisting of 72 observations estimated from PSLM surveys in Pakistan.  For this purpose, the study applies panel data techniques. The results reveal that remittances have significant and statistically positive effects on health expenditures. Moreover, the regional break-up of the results reveals that these results are equally valid in urban areas, but they are not valid in rural areas. Further, there is also a statistically significant positive relation between health expenditures and income. The effects of income on health expenditures are statistically significant in both regions. At a policy level, it is recommended that such policies should be chalked out which can increase the inflow of foreign remittances and create awareness about the utilization of these remittances, especially in the rural areas in Pakistan. Further, growth-enhancing policies should be formulated and implemented in letter and spirit.