Publication: Evaluating the Economic Impact of International Remittances on Developing Countries Using Household Surveys: A Literature Review
Abstract
This literature review covers 50 recent empirical studies of the economic impact of international remittances on the developing world that are based on household survey data. It begins by reviewing the considerable methodological problems confronting economic work on international remittances, and then examines the strengths and weaknesses of various economic studies of the impact of remittances in the developing world on such outcomes as: poverty and inequality, health and education, investment and savings, labour supply and participation, and economic growth. It finds that while international remittances generally have a positive impact on poverty and health in the developing world, remittances can have negative effects on labour supply, education, and economic growth.
Link to Data Set
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Citations
Collections
Related items
Showing items related by metadata.
Publication The Determinants of International Remittances in Developing Countries(2009)What causes developing countries to receive different levels of international remittances? This paper addresses this question by using new data on such variables as the skill composition of migrants, poverty, and interest and exchange rates to examine the determinants of remittances. The paper finds that the skill composition of migrants does matter in remittance determination. Countries which export a larger share of high-skilled (educated) migrants receive less per capita remittances than countries which export a larger proportion of low-skilled migrants. It also finds that the level of poverty in a labor-sending country does not have a positive impact on the level of remittances received.Publication The Economic Impact of International Remittances on Poverty and Household Consumption and Investment in Indonesia(2010-09-01)This paper analyzes the impact of international remittances on poverty and household consumption and investment using panel data (2000 and 2007) from the Indonesian Family Life Survey. Three key findings emerge. First, using an instrumental variables approach to control for selection and endogeneity, it finds that international remittances have a large statistical effect on reducing poverty in Indonesia. Second, households receiving remittances in 2007 spent more at the margin on one key consumption good -- food -- compared with what they would have spent on this good without the receipt of remittances. Third, households receiving remittances in 2007 spent less at the margin on one important investment good -- housing -- compared with what they would have spent on this good without the receipt of remittances. Households receiving international remittances in Indonesia are poorer than other types of households, and thus they tend to spend their remittances at the margin on consumption rather than investment goods.Publication International Remittances and the Household : Analysis and Review of Global Evidence(World Bank, Washington, DC, 2007-02)This paper examines the economic impact of international remittances on countries and households in the developing world. To analyze the country-level impact of remittances, the paper estimates an econometric model based on a new data set of 115 developing countries. Results suggest that countries located close to a major remittance-sending region (like the United States, OECD-Europe) are more likely to receive international remittances, and that while the level of poverty in a country has no statistical effect on the amount of remittances received, for those countries which are fortunate enough to receive remittances, these resource flows do tend to reduce the level and depth of poverty. At the household level, a review of findings from recent research suggest that households receiving international remittances spend less at the margin on consumption goods-like food-and more on investment goods-like education and housing. Households receiving international remittances also tend to invest more in entrepreneurial activities.Publication International Migration, Remittances, and Poverty in Developing Countries(World Bank, Washington, DC, 2003-12)Few studies have examined the impact of international migration and remittances on poverty in a broad cross-section of developing countries. The authors try to fill this gap by constructing a new data set on poverty, international migration, and remittances for 74 low- and middle-income developing countries. Four key findings emerge: 1) International migration-defined as the share of a country's population living abroad-has a strong, statistical impact in reducing poverty. On average, a 10 percent increase in the share of international migrants in a country's population will lead to a 1.9 percent decline in the share of people living in poverty ($1.00 a person a day). 2) Distance to a major labor-receiving region-like the United States or OECD (Europe)-has an important effect on international migration. Developing countries that are located closest to the United States or OECD (Europe) are also those countries with the highest rates of migration. 3) An inverted U-shaped curve exists between the level of country per capita income and international migration. Developing countries with low or high per capita GDP produce smaller shares of international migrants than do middle-income developing countries. The authors find no evidence that developing countries with higher levels of poverty produce more migrants. Because of considerable travel costs associated with international migration, international migrants come from those income groups which are just above the poverty line in middle-income developing countries. 4) International remittances-defined as the share of remittances in country GDP-have a strong, statistical impact in reducing poverty. On average, a 10 percent increase in the share of international remittances in a country's GDP will lead to a 1.6 percent decline in the share of people living in poverty.Publication The Demographic, Economic and Financial Determinants of International Remittances in Developing Countries(World Bank, Washington, DC, 2008-03)What causes developing countries to receive different levels of international remittances? This paper addresses this question by using new data on such variables as the skill composition of migrants, poverty, and interest and exchange rates to examine the determinants of remittances. The paper finds that the skill composition of migrants does matter in remittance determination. Countries which export a larger share of high-skilled (educated) migrants receive less per capita remittances than countries which export a larger proportion of low-skilled migrants. It also finds that the level of poverty in a labor-sending country does not have a positive impact on the level of remittances received.
Users also downloaded
Showing related downloaded files
No results found.