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The Impact of International Remittances on Income, Work Efforts, Poverty and Inequality: Evidence from Vietnam

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Author Info

  • Nguyen, Cuong
  • van den Berg, Marrit
  • Lensink, Robert

Abstract

This study provides new empirical evidence on the impact of international remittances. Using data from the two most recent Vietnam Household and Living Standard Surveys, the paper estimates the effect of remittances on per capita income, per capita expenditure, work efforts, poverty and inequality. The estimates suggest that a rise in international remittances in Vietnam increases household income and expenditure. Yet, the study also finds evidence that international remittances may create a moral hazard problem by inducing disincentives to work. Moreover, the study suggests that international remittances, at the least in the short run, do not reduce poverty. They may even lead to an increase in inequality. Overall, the study casts doubts on the view that international remittances may play a crucial role in reducing poverty in developing countries.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 50313.

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Date of creation: 20 Dec 2009
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Handle: RePEc:pra:mprapa:50313

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Related research

Keywords: Remittances; poverty; expenditure; income; household survey; Vietnam;

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References

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  1. Jean-Paul Azam & Flore Gubert, 2006. "Migrants' Remittances and the Household in Africa: A Review of Evidence," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 15(2), pages 426-462, December.
  2. Cristina Cattaneo, 2008. "International Migration, the Brain Drain and Poverty:A Cross Country Analysis," KITeS Working Papers, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy 212, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jan 2008.
  3. Adams, Richard H. Jr., 2007. "International remittances and the household : analysis and review of global evidence," Policy Research Working Paper Series 4116, The World Bank.
  4. World Bank, 2008. "The Migration and Remittances Factbook 2008," World Bank Publications, The World Bank, number 6383, August.
  5. Rapoport, Hillel & Docquier, Frédéric, 2005. "The Economics of Migrants’ Remittances," IZA Discussion Papers 1531, Institute for the Study of Labor (IZA).
  6. Cox, Donald & Eser, Zekeriya & Jimenez, Emmanuel, 1998. "Motives for private transfers over the life cycle: An analytical framework and evidence for Peru," Journal of Development Economics, Elsevier, Elsevier, vol. 55(1), pages 57-80, February.
  7. Edgar R. Rodriguez, 1996. "International Migrants' Remittances in the Philippines," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 29(s1), pages 427-32, April.
  8. Alejandra Cox Edwards & Manuelita Ureta, 2003. "International Migration, Remittances, and Schooling: Evidence from El Salvador," NBER Working Papers 9766, National Bureau of Economic Research, Inc.
  9. Cuong Nguyen Viet, 2008. "Do Foreign Remittances Matter to Poverty and Inequality? Evidence from Vietnam," Economics Bulletin, AccessEcon, vol. 15(1), pages 1-11.
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Citations

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Cited by:
  1. Nguyen Viet Cuong, 2014. "Does Urbanization Help Poverty Reduction in Rural Areas? Evidence from a Developing Country," Working Papers, Department of Research, Ipag Business School 2014-178, Department of Research, Ipag Business School.
  2. Nguyen, Cuong & Nguyen, Hoa, 2013. "Do Internal and International Remittances Matter to Health, Education and Labor of Children? The Case of Vietnam," MPRA Paper 48672, University Library of Munich, Germany.

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