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The Effects of International Remittances on Poverty and Inequality in Ethiopia

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  • Beyene, Berhe Mekonnen

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    (Dept. of Economics, University of Oslo)

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    Abstract

    The paper studies the effects of international remittances on poverty and inequality in Ethiopia using an urban household survey from 2004. In order to identify the effects of remittances on poverty and inequality, counterfactual consumption in the hypothetical case of no remittance is estimated in a selection corrected estimation framework. Inequality and poverty values in the hypothetical and actual cases are then compared. There is a significant reduction in poverty while inequality does not change. The head count, the poverty gap and the squared poverty gap ratios decreased by 2.5%, 1.1% and 0.6% respectively.

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    File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2012/Memo-13-2012.pdf
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    Bibliographic Info

    Paper provided by Oslo University, Department of Economics in its series Memorandum with number 13/2012.

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    Length: 37 pages
    Date of creation: 15 Mar 2012
    Date of revision:
    Handle: RePEc:hhs:osloec:2012_013

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    Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
    Phone: 22 85 51 27
    Fax: 22 85 50 35
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    Web page: http://www.oekonomi.uio.no/indexe.html
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    Keywords: remittances; poverty; inequality; Ethiopia;

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    1. David Mckenzie & Hillel Rapoport, 2004. "Network Effects and the Dynamics of Migration and Inequality: Theory and Evidence from Mexico," Working Papers 2004-3, Department of Economics, Bar-Ilan University.
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    16. Adams, Richard H. Jr., 2005. "Remittances, household expenditure and investment in Guatemala," Policy Research Working Paper Series 3532, The World Bank.
    17. Brown, Richard P.C. & Jimenez, Eliana, 2007. "Estimating the Net Effects of Migration and Remittances on Poverty and Inequality: Comparison of Fiji and Tonga," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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