Adams, Richard H., Jr.Cuecuecha, Alfredo2012-03-192012-03-192010-09-01https://hdl.handle.net/10986/3916This 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.CC BY 3.0 IGOAGRICULTURAL PRODUCTIONAMOUNT OF REMITTANCESBANK POLICYCAPITA EXPENDITURECAPITAL INVESTMENTSCOUNTERFACTUALCULTURAL CHANGEDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT ECONOMICSDUMMY VARIABLEDUMMY VARIABLESDURABLEDURABLE GOODSDURABLESECONOMETRIC TECHNIQUESECONOMIC DEVELOPMENTEFFECT OF REMITTANCESEFFECTS OF REMITTANCESEXCHANGE RATEEXPENDITUREEXPENDITURE DISTRIBUTIONEXPENDITURESFEMALE-HEADED HOUSEHOLDSFINANCIAL ASSETSFIRST STAGE MODELFOOD GOODSFOOD ITEMSFUNGIBLEGLOBALIZATIONHOLDINGSHOUSEHOLD BUDGETHOUSEHOLD COMPOSITIONHOUSEHOLD CONSUMPTIONHOUSEHOLD HEADHOUSEHOLD HEADSHOUSEHOLD INCOMESHOUSEHOLD LEVELHOUSEHOLD NUMBERHOUSEHOLD SURVEYHOUSEHOLD SURVEY DATAHOUSEHOLD SURVEYSHOUSEHOLD WELFAREHUMAN CAPITALIMMIGRANTIMPACT OF REMITTANCESINCOMEINCOME DATAINCOME INEQUALITYINCOME REDISTRIBUTIONINCOME TRANSFERSINSTRUMENTINSURANCEINTERNATIONAL BANKINTERNATIONAL MIGRATIONINTERNATIONAL REMITTANCESLABOR FORCELABOR MARKETLEVEL OF POVERTYMICRO-ENTERPRISESMIGRANTMIGRANT NETWORKSMIGRANT REMITTANCESMIGRANT WORKERSMIGRATIONMIGRATION PATTERNSMONETARY FUNDNATIONAL POVERTYNATIONAL POVERTY LINENUMBER OF CHILDRENNUMBER OF HOUSEHOLDSNUMBER OF INTERNATIONAL MIGRANTSNUTRITIONPARAMETER ESTIMATESPERMANENT INCOME HYPOTHESISPOLICY RESEARCHPOLICY RESEARCH WORKING PAPERPOORPOOR PEOPLEPOOR PERSONPOVERTY GAPPOVERTY INDEXPOVERTY LINEPOVERTY MEASUREPOVERTY MEASURESPOVERTY REDUCTIONPRIMARY EDUCATIONPROGRESSREMITTANCEREMITTANCE FLOWSREMITTANCE RECEIVINGREMITTANCE RECEIVING HOUSEHOLDSREMITTANCE-RECEIVING HOUSEHOLDSREMITTANCESRESPECTRURALRURAL AREASRURAL ASSETRURAL HOUSEHOLDSSAVINGSSECONDARY EDUCATIONSEXSOCIAL NETWORKSSPOUSESQUARED POVERTY GAP INDEXSTANDARD ERRORSUNIVERSITY EDUCATIONURBAN AREASWorld Bank10.1596/1813-9450-5433