This study investigates the effect of Indonesian Migrant Workers (IMW) remittances on poverty, taking into account the mediating role of regional economic growth, using balanced panel data from 34 provinces in Indonesia over 2020–2024. A two-stage mediation approach was applied using Random Effects (GLS) estimation with robust standard errors. Model selection was conducted through the Chow Test, Hausman Test, and Breusch-Pagan LM Test, which consistently confirmed Random Effects as the best estimator for both stages. Mediation effects were assessed using the Sobel test. Stage 1 results show remittances have a positive and significant effect on regional economic growth (β = 0.5678, p < 0.01). Stage 2 results show remittances directly and significantly reduce poverty (β = −2.1649, p < 0.05), while regional economic growth is not statistically significant (p = 0.508). The Sobel test confirms that economic growth does not serve as a mediator (Z = 0.656, p = 0.512), indicating that remittances reduce poverty mainly through direct household income transfers rather than through stimulating aggregate regional output. Control variables HDI and UNEMP are both significant. These findings align with the short-run predictions of the Lewis Two-Sector Model and the non-inclusive growth phenomenon in Indonesia. Policy implications include reducing remittance transfer costs, improving financial literacy among IMW families, and pursuing more inclusive economic growth strategies in migrant-sending regions.

Remittances, Poverty, Economic Growth, Indonesian Migrant Workers

Adams, R. H., & Page, J. (2005). Do international migration and remittances reduce poverty in developing countries? World Development, 33(10), 1645–1669. https://doi.org/10.1016/j.worlddev.2005.05.004

Agussalim, A., Nursini, N., Suhab, S., Kurniawan, R., Samir, S., & Tawakkal, T. (2024). The Path to Poverty Reduction: How Do Economic Growth and Fiscal Policy Influence Poverty Through Inequality in Indonesia? Economies, 12(12), 316. https://doi.org/10.3390/economies12120316

Ahmad Yusuf, A., Khusnul Maryam, A., Fathi Shiddieqy, D., & Awad, A. (2025). The role of Sukuk financing in economic growth and poverty reduction: Empirical evidence from selected ASEAN countries. Public and Municipal Finance, 14(2), 42–50. https://doi.org/10.21511/pmf.14(2).2025.04

Anggara, R., Mulyana, S., Gayatri, G., & Hafiar, H. (2024). Understanding the motivations of being Indonesian migrant workers. Cogent Social Sciences, 10(1). https://doi.org/10.1080/23311886.2024.2333968

As’ad, A., & Ekananda, M. (2024). Dynamic of Economic Motives of Indonesia’s Migrant Workers’ Remittances. Jurnal Ekonomi & Studi Pembangunan, 25(2), 248–260. https://doi.org/10.18196/jesp.v25i2.22610

Azizi, S., Aftabi, A., Azizkhani, M., & Yektansani, K. (2024). Remittances and economic growth: a blessing for middle-income countries, ineffective for low-income countries. Journal of Economic Studies, 51(6), 1285–1303. https://doi.org/10.1108/JES-04-2023-0207

Banta, V. L. (2024). Caring for Indebted Migrant Workers: Financial Literacy Training, Debt, and Filipino Migrant Workers in Dubai. The Professional Geographer, 1–9. https://doi.org/10.1080/00330124.2024.2410764

Catrinescu, N., Leon-Ledesma, M., Piracha, M., & Quillin, B. (2009). Remittances, Institutions, and Economic Growth. World Development, 37(1), 81–92. https://doi.org/10.1016/j.worlddev.2008.02.004

Combes, J.-L., & Ebeke, C. (2011). Remittances and Household Consumption Instability in Developing Countries. World Development, 39(7), 1076–1089. https://doi.org/10.1016/j.worlddev.2010.10.006

Coupet, E. (2025). Is There a Demand Pull or Supply Push Between Southwest Border Apprehensions and Employment in the United States? International Journal of Economics, Business and Management Research, 09(01), 210–225. https://doi.org/10.51505/IJEBMR.2025.9115

Djafar, F., & Hassan, M. K. H. (2012). Dynamics of Push and Pull Factors of Migrant Workers in Developing Countries: The Case of Indonesian Workers in Malaysia . Journal of Economics and Behavioral Studies , 4(12), 703–711.

Fan, Q., Chen, J., & Yang, W. (2024). Applying a push–pull perspective to migrant worker turnover: The role of retention decision satisfaction and geographic distance. Journal of Business Research, 178, 114652. https://doi.org/10.1016/j.jbusres.2024.114652

Farashah, A. D., & Blomquist, T. (2019). Exploring employer attitude towards migrant workers. Evidence-Based HRM: A Global Forum for Empirical Scholarship, 8(1), 18–37. https://doi.org/10.1108/EBHRM-04-2019-0040

Garcia-Fuentes, P. A., Kennedy, P. L., & Ferreira, G. F. C. (2025). Growth effects of remittances in developing countries: A growth accounting approach. Emerging Markets Review, 67, 101303. https://doi.org/10.1016/j.ememar.2025.101303

Gautam, D. P. (2017). Remittance inflows and starting a business. Journal of Entrepreneurship and Public Policy, 6(3), 290–314. https://doi.org/10.1108/JEPP-D-17-00002

Giuliano, P., & Ruiz-Arranz, M. (2009). Remittances, financial development, and growth. Journal of Development Economics, 90(1), 144–152. https://doi.org/10.1016/j.jdeveco.2008.10.005

Güner, P. B. (2019). Theory of the Capability Approach (pp. 7–11). https://doi.org/10.1007/978-3-658-26070-5_3

Huay, C. S., & Bani, Y. (2018). Remittances, poverty and human capital: evidence from developing countries. International Journal of Social Economics, 45(8), 1227–1235. https://doi.org/10.1108/IJSE-10-2017-0454

Lee, E. S. (1996). A Theory of Migration. Demography, 3(1), 47–57.

Mahembe, E., & Odhiambo, N. M. (2019). Foreign aid and poverty reduction: A review of international literature. Cogent Social Sciences, 5(1). https://doi.org/10.1080/23311886.2019.1625741

Maksum, A., Tsay, C., & Muhammad, A. (2021). Indonesian Migrant Workers in Taiwan: The State Dilemma and People’s Realities. Jurnal Ilmu Sosial Dan Ilmu Politik, 24(1), 80. https://doi.org/10.22146/jsp.51303

Martey, D. M. (2019). Remittance Use and Wellbeing: Evidence from Ghana’s Experience. University of Ghana.

Maryam, A. K., Yusuf, A. A., & Sudrajat, A. (2024). Economic Growth Vs. Poverty in Indonesia: What has Happened? Journal of Economics, Finance And Management Studies, 07(04). https://doi.org/10.47191/jefms/v7-i4-15

Nasrin, N., Haider, M. Z., & Ahsan, Md. N. (2024). Well-being effect of international migration and remittance on human and gender development in South Asian countries. PLOS ONE, 19(4), e0300597. https://doi.org/10.1371/journal.pone.0300597

Ojeyinka, T. A., & Ibukun, C. O. (2024). Do remittances mitigate poverty? Evidence from selected countries in Africa, Asia and Latin America. Economic Change and Restructuring, 57(3), 93. https://doi.org/10.1007/s10644-024-09666-1

Pastpipatkul, P., Ko, H., & Dirth, G. R. (2025). Impact of Government Investment in Human Capital on Labor Force Participation and Income Growth Across Economic Tiers in Southeast Asian Countries. Economies, 13(9), 249. https://doi.org/10.3390/economies13090249

Rahma Viona Angraeni, Siti Nurjanah, & Sri Indah Nikensari. (2024). THE EFFECT OF INFLATION, MINIMUM WAGE, LABOR ABSORPTION AND THE COVID-19 PANDEMIC ON POVERTY IN INDONESIA. Finance : International Journal of Management Finance, 1(4), 43–48. https://doi.org/10.62017/finance.v1i4.47

Rahmawati, V. S., Salsabila, R., Quarina, Q., & Putra, M. (2024). Pekerja Migran Indonesia: Problematika Pahlawan Devisa Negara (Vol. 6, Number 6). Microeconomics Dashboard Laboratorium Ilmu Ekonomi FEB UGM.

Salwa. (2025, November 14). High Informal Employment in Indonesia Reflects Structural Poverty, Says Economist at UGM. Ugm.Ac.Id.

Sulaeman, M., Suharno, S., & Ahmad, A. A. (2024). Economic Growth in Indonesia: Dynamics of Poverty, Unemployment, and Health Budgets. Agregat: Jurnal Ekonomi Dan Bisnis, 8(2), 179–198. https://doi.org/10.22236/agregat_vol8.i2/16418

Suparta, I. M. (2025). Impact of Inflation on Unemployment and Poverty in Indonesia. International Journal of Economics, Business and Management Research, 09(06), 349–360. https://doi.org/10.51505/IJEBMR.2025.9619

Suryahadi, A., Raya, U. R., Marbun, D., & Yumna, A. (2012). Accelerating Poverty and Vulnerability Reduction: Trends, Opportunities, and Constraints.

Torm, N., & Oehme, M. (2024). Social protection and formalization in low- and middle-income countries: A scoping review of the literature. World Development, 181, 106662. https://doi.org/10.1016/j.worlddev.2024.106662

Ukhtiyani, K., & Indartono, S. (2020). Impacts of Indonesian Economic Growth: Remittances Migrant Workers and FDI. JEJAK, 13(2), 280–291. https://doi.org/10.15294/jejak.v13i2.23543

Urbański, M. (2022). Comparing Push and Pull Factors Affecting Migration. Economies, 10(1), 21. https://doi.org/10.3390/economies10010021

World Bank, W. B. (2017). Indonesia’s Global Workers: Juggling Opportunities and Risks.