Money Talks: How Remittances Contribute to Wealth Creation in Post-conflict Communities

This study investigates the impact of remittances on household wealth in post-conflict Sri Lanka, a country that endured a prolonged conflict from 1983 to 2009. Utilizing data from the Secure Livelihood Consortium (SLRC) conducted in 2012/2013 and in 2015, we employ a difference-in-difference (DiD) approach to analyse the wealth trajectories of households that receive remittances compared to those that do not. Our findings indicate that although remittances are often targeted at poorer households, they have a positive impact on wealth accumulation over time. This suggests that remittances can play an important role in the economic recovery of post-conflict communities. The results have three policy implications. First, leveraging remittances as a tool for economic recovery could enhance the effectiveness of development strategies in post-conflict regions. Second, policymakers should consider initiatives that facilitate the formalization of remittance channels to maximize their positive impact on household wealth. Third, financial literacy programmes could help remittance-receiving households make more productive use of these funds, further promoting sustainable development. By providing empirical evidence from a post-conflict setting, this study contributes to the broader discourse on remittances and economic development, offering insights that are both academically relevant and practically valuable for policymakers and development practitioners.