The Effect of Diaspora Remittances on Health Outcomes in Kenya

Abstract

Background: A healthy population positively impacts on a country’s economic growth. However, two measures of health outcomes in Kenya -life expectancy at birth and under-five mortality rate, on average are 58.2 years and 85.9 deaths per 1000 births against government targets of 72 years and 24 deaths per 1000 births respectively. The consequences of the above scenario have hampered country’s productivity, national income and poverty reduction initiatives. The general objective of the study was therefore to determine the effect of diaspora remittances on health outcome. Specifically, this study examined the effect of diaspora remittance on life expectancy at birth, and the effect of diaspora remittance on under-five mortality rate. Methods: Time series data for the period 1985 to 2018 were used in this study. Multivariate regression was specified and the Ordinary Least Square (OLS) estimation technique was used in estimating the direction and coefficients of diaspora remittance and control variables on measures of health outcomes (under-five mortality rate and life expectancy at birth). The research was informed by Grossman theoretical model with various inputs into health production function Results: The study found that the coefficients of diaspora remittance, official development assistance were positive and statistically significant. While immunization uptake level negatively affected life expectancy at birth. The under-five mortality rate was negatively affected by diaspora remittances, private consumption and official development assistance, while immunization uptake level positively affected it. From the findings of the study, the government in collaboration with financial institutions should guarantee cheap, efficient, and safe remittance of employee compensation from abroad for the country to realize better health outcomes.