INTRODUCTION: Remittances typically refer to money transfers by foreign workers to their home countries. Remittances are not a new phenomenon in the world, being a normality associated with migrations that have always been part of human history. Remittances are playing an important role in the economies of many developing and low-income countries. Pakistan is a labor-rich country; therefore, as neoclassical theory shows, if workers are unable to find work and/or wages to satisfy their needs, they will look elsewhere. The history of Pakistan provides us with a new trend of emigration almost every decade. Remittances have been an important source of foreign exchange earnings for Pakistan since 1970. During the last four decades Pakistan has received significant amounts of remittances, however, fluctuations in the inflow of remittances have also been observed. The inflow of remittances positively affects economic growth by reducing the current account deficit, improving the balance of payments position and reducing the dependence on external borrowing (Iqbal and Sttar, 2005). Pakistan, like other developing countries in the world, is known for high labor migration and growth. remittance. It is argued that this high migration is a result of the poor economic conditions of the country because the economy is facing so many problems such as unemployment, illiteracy, poverty, inflation and terrorism etc. The people of Pakistan are migrating to foreign countries in search of jobs and change their standard of living. It is also argued that due to the high level of unemployment, individuals are going abroad to find jobs and livelihood for their family and this unemployment is creating the problem of brain drain. The effect of remittances is not only multidimensional but .... .. at the center of the article ......A.(2012), “Worker's Remittances and Economic Growth in South Asia”,MPRA Paper 39001, University Library of Munich, Germany.Katsushi, S.I., Raghav, G.,Abdilahi, A., and Nidhi Kaicker,(2011),"Remittances, Growth and Poverty: New Evidence from Asian Countries",Discussion Paper Series DP2011-30, Research Institute for Economics & Business Administration, Kobe University.Levine, R. (1997) , “Financial Development and Economic Growth: Views and Agenda” Journal of Economic Literature, 35(2), 688–72. Qayyum, A., Javid, M. and Arif, U. (2008), “Impact of Remittances on Economic Growth and Poverty: Evidence from Pakistan”, MPRA Paper 22941, University Library Munich, Germany. Siddiqi, R., and Kemal, A.R., (2006, “Remittances, Trade Liberalization, and Poverty in Pakistan: The Role of Excluded Variables in Analysis of Poverty Change,” PIDE Working Papers 2006:1.