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

Acosta, Pablo; Calderón, Cesar; Fajnzylber, Pablo; Lopez, Humberto

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

2007

Acosta, Pablo | Calderón, Cesar | Fajnzylber, Pablo | Lopez, Humberto

Workers' remittances have become a major source of income for developing countries. However, little is still known about their impact on poverty and inequality. Using a large cross-country panel dataset, the authors find that remittances in Latin American and Caribbean (LAC) countries have increased growth and reduced inequality and poverty. These results are robust to the use of different instruments that attempt to correct for the potential endogeneity of remittances. Household survey-based estimates for 10 LAC countries confirm that remittances have negative albeit relatively small inequality and poverty-reducing effects, even after imputations for the potential home earnings of migrants.

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AGROVOC Keywords

developing countries economic conditions economics elasticity fertility growth growth models household income household surveys income distribution migrants migration poverty poverty reduction remittances secondary education wages

Bibliographic information

Publisher

World Bank, Washington, DC

Other Subjects

Migrant destination countries; Empirical evidence; Migrant-sending countries; Inequality results; Migrant transfers; Gdp; Squared poverty gap; Growth regression; Remittance receipts; Growth literature; Extended family; Practitioners; Inequality changes; Estimated reduction; Point estimates; Fertility rate; Progress; Country; Balance of payment; Increase in remittances; Poverty line; Richer countries; Average income level; Growth equation; Inequality regressions; Cross-country studies; Inequality variables; Policy research; High correlation; Income sources; Income inequality; Country-specific effects; Per capita income; Dynamic panel; Cross-country analysis; Global level; Poverty reducing; Poverty gap; Significant impact; Migration flows; Elasticity of poverty; Equalizing effect; Log normal; International remittances; Capita income; Mean income; Positive value; Annual growth rate; Inequality levels; Recipient households; Per capita income level; Migrant families; Gini index; Impact of migration; Compensation of employees; Poverty measures; Negative coefficient; Official development assistance; Remittances flows; Gini coefficient; Country specific; Per capita income levels; Fixed effects; Income source; Cross-country panel; Household assets; Household survey data; Cumulative distribution; Migrant family; Household level; Log-normal approximation; Data availability; Density function; Dependent variable; Balance of payment statistics; Family members; Conditional convergence; Migration patterns; Remittance receiving; Exogenous variable; Data on remittances; Positive impact; Explanatory variables; Lagged values; Significant effect; Reducing inequality; Income levels; Policy research working paper; Difference error; Country remittances; Capital flows; Migrant; Serial correlation; Migrant family members; Impact of remittances; Headcount ratio; Average income growth; Remittance; Simulations; Developing world; Foreign remittances; Log-normal distribution; Empirical estimates; Poverty levels; Flows of remittances; Dynamic panel framework; Macroeconomic effects; Increase growth; Effect of remittances; Migrant networks; Absence of remittances; Growth rates; Lagged levels; Headcount poverty; National level; Empirical work; Growth regressions; Families due; Remittance sender; Micro data; Growth context; Absolute terms; Rates of growth; Development practitioners; Economics literature; Positive effect; Country regressions; Capita remittances; Endogenous variables; Empirical section; Respect; 0 hypothesis; Household members; Estimated coefficients; Developing country; Country characteristics; Inequality elasticities; Minority; Error terms; Reduced inequality; Inequality aversion; Growth of remittances; Functional form; Home countries; Empirical results; Annual growth; Growth data; Effects of remittances; Increasing income inequality; Error term; Econometric issues; Average income; Distributional impact; Cross-country data

License

Policy Research Working Paper; No. 4249http://creativecommons.org/licenses/by/3.0/World BankCC BY 3.0 Unported

Source

Policy Research Working Paper; No. 4249

In AGRIS since: 2014-09-15

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Links

http://hdl.handle.net/10986/7400

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