Analyzing the Impact of Remittances on Social Welfare in Somalia: A Data-Driven Approach

The purpose of this study is to dissect the influence of remittances on social welfare within Somalia over a period from 2011 to 2022. The study utilizes an Autoregressive Distributed Lag (ARDL) model to meticulously analyze the interplay between social welfare and pivotal economic indicators: remittances, trade openness, investment, and price levels. The results of the control variables underscore the positive correlation between remittances, trade openness, and investment with social welfare, while identifying a negative relationship with price levels. The findings demonstrate that a 1% increase in remittances leads to a noticeable enhancement in social welfare, with a 0.371% improvement in the long run and an even greater 0.514% boost in the short term, underscoring the significant impact of remittances on societal well-being. This emphasizes remittances' critical role in bolstering the well-being of recipients. Consequently, the research advocates for an enhancement of Somalia's remittance infrastructure, recommending the development of a resilient, secure, and comprehensive network to amplify social welfare benefits.