What is the Impact of International Remittances on Poverty and Inequality in Latin America?

Acosta, Pablo; Calderón, César; Fajnzylber, Pablo; López, Humberto

doi:10.1016/j.worlddev.2007.02.016

Cited by 432 publications

(411 citation statements)

References 26 publications

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“…The study finds that a 10 percent increase in per capita official international remittances will lead to a 3.5 percent decline in the share of people living in poverty. Similar results are reported by Acosta et al (2008) for Latin America and the Caribbean, while Adams (1991) finds that once remittances are included in household income, the number of poor households decline by 9.8 percent. Edwards and Ureta (2003) examine the impact of remittances on household schooling decisions 2 All figures were taken from World Development Indicators Online.…”

Section: Introductionsupporting

confidence: 67%

Economic volatility and remittances

Craigwell

Jackman²,

Moore

2010

International Journal of Development Issues

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Remittances have been rising fairly rapidly around the world and are the fastest growing source of foreign exchange earnings for developing countries. The empirical literature suggests that remittances can have both positive and negative influences on the growth and development of receiving states. However, the literature has been largely silent on the potential effects that these flows can have on economic volatility in the receiving country. This paper evaluates the impact of remittance flows on economic volatility in a panel of 95 countries over the period 1970 to 2005. The study reports that remittances can play a key role in mitigating the effect of adverse output shocks but exert no significant influence on consumption and investment volatility. Moreover, important differential impacts exist across the various county groupings.JEL Classification: F240; E320; P500

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Section: Introductionsupporting

confidence: 67%

Economic volatility and remittances

Craigwell

Jackman²,

Moore

2010

International Journal of Development Issues

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“…either increase or decrease income inequality (Acosta et al, 2008). Moreover, income inequality might have a distinct effect on SWB, but this could be "confounded" by the relative income effect (see on this point, e.g., Senik, 2008).…”

Section: Does Income Inequality Explain the Results?mentioning

confidence: 99%

“…Estimates suggest that migrants sent about US $30 billion to rural areas in 2005 (Gong et al, 2008). Such large cash flows have important and complex effects not only on the welfare of family members left behind, but also on the development, income distribution and welfare of rural villages (e.g., Acosta et al, 2008;Howell, 2014). This paper investigates how remittances affect the relative (or positional) concerns of rural households using subjective well-being (SWB hereafter) as a proxy for the experienced utility (Kahneman and Sugden, 2005).…”

Section: Introductionmentioning

confidence: 99%

“…The remittances literature focuses mainly on the absolute effect of remittances on well-being, particularly in relation to income inequality and poverty (see e.g., Acosta et al, 2008;Akay et al, 2013). Remittances are expected to be positively associated with the well-being of individuals left behind since they represent an additional (or substitutive) income source.…”

Section: Introductionmentioning

confidence: 99%

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Remittances and relative concerns in rural China

Akay

Bargain

Giulietti³

et al. 2016

China Economic Review

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The paper investigates the impact of remittances on the relative concerns of households in rural China. Using the Rural to Urban Migration in China (RUMiC) dataset we estimate a series of well-being functions to simultaneously explore the relative concerns with respect to income and remittances. Our results show that although rural households experience substantial utility loss due to income comparisons, they gain utility by comparing their remittances with those received by their reference group. In other words, we find evidence of a "status-effect" with respect to income and of a "signal-effect" with respect to remittances. The magnitudes of these two opposite effects are very similar, implying that the utility reduction due to relative income is compensated by the utility gain due to relative remittances. This finding is robust to various specifications, controlling for the endogeneity of remittances and selective migration, as well as a measure of current migrants' net remittances calculated using counterfactual income and expenditures.

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“…The question of how they influence overall poverty outcomes (see, for example, Adams and Page [2005], Gupta et al [2009]), as well as the income distribution of the recipient country is of central interest (e.g. Adams [1989], Barham and Boucher [1998], Acosta et al [2008], Shen et al [2010]). However, some studies also take a more micro-oriented approach and investigate the effects on well-being of the household members remaining at home.…”

Section: Introductionmentioning

confidence: 99%

Low-Skilled Labor Migration in Tajikistan: Determinants and Effects on Expenditure Patterns

Meier

2014

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: It is often assumed that international labor migration from Tajikistan, while having no noticeable effects on investment (usually defined as medium and long-term consumption, such as education, or investment into housing or business), on average leads to an increase in short-term consumption, mostly food. In this paper, a simple household-level model determining the migration decision is developed and tested empirically. In a second step, the effect of low-skilled labor migration on household expenditure shares is analyzed using 2SLS. While only weak effects of migration measured by a simple dummy are visible, repeating the analysis using the length of the migration spell instead, as well as its squared term, reveals that labor migration apparently takes a while to "kick in" and become profitable to those remaining at home. The observed long-term effects on household consumption patterns, albeit being rather small, actually speak in favour of investment of remittances, with the respective shares increasing over time, while the budget share spent on food slowly decreases. Terms of use: Documents in

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What is the Impact of International Remittances on Poverty and Inequality in Latin America?

Cited by 432 publications

References 26 publications

Economic volatility and remittances

Economic volatility and remittances

Remittances and relative concerns in rural China

Low-Skilled Labor Migration in Tajikistan: Determinants and Effects on Expenditure Patterns

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