The wealth of poor agricultural nations: evidence of self-employment and remittances in SAARC

Abstract The role of remittances in simulating economic activity has been widely explored over recent decades. As, an important component of external economic support, remittances affect the income distribution and development, especially in undeveloped countries. However, the form and influence of remittances can vary, present challenges for policymakers. Significantly, remittances also play a role in generating employment opportunities across different sectors of economy. In the SAARC region, economic structural shifts—especially between the agriculture and manufacturing sectors. This study analyzes the impact of remittances inflow effects on employment in the agriculture sector in India, Pakistan, Bhutan, Nepal, and Bangladesh between 2006 and 2022. The research employees in this research are descriptive statistics, correlation matrix analysis, and Generalized Method of Moments (GMM) regression to evaluate the relationship between remittances and employment. Findings reveal a positive but statistically insignificant relationship between remittance inflow and self-employment. However, agriculture employment has a significant positive impact on remittance inflow. Literature findings interpret the results as hindering the growth in the promotion of positive self-employment (entrepreneurship) by accelerating the allocation of funds to education, employee training, and creating as much capacity to absorb the excessive supply of labor in each sector. In this context, moderating remittance inflows might serve as a policy tool to encourage active labor market engagement.