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The Effects of Remittances on Poverty at the Household Level in Bolivia: A Propensity Score Matching Approach

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  • López-Videla, Bruno
  • Machuca, Carlos Emilio
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    Abstract

    In the last few years, Bolivia has experienced a growing migration phenomenon. Many household members migrate from their homes in order to look for better opportunities and to improve their household income. In this paper, we aim to explore the effects of remittances on Bolivian household poverty levels. We use micro data from the 2008 Household Survey, conducted by the National Institute of Statistics (INE). We calculate propensity score matching estimators in order to address the potential bias due to heterogeneous factors in the sample. Then, we estimate the average treatment effect on the treated to compare the poverty level between households which receive and do not receive remittances. Results show that remittances have a positive effect on reducing urban households’ poverty level, whereas there is no effect on rural households’ poverty.

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    File URL: http://mpra.ub.uni-muenchen.de/55201/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 55201.

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    Date of creation: 27 Feb 2014
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    Publication status: Published in Políticas Públicas 1.2(2014): pp. 7-22
    Handle: RePEc:pra:mprapa:55201

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    Keywords: Remittances; poverty; propensity score matching; Bolivia.;

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    1. Eliana V. Jimenez-Soto & Richard P. C. Brown, 2012. "Assessing the Poverty Impacts of Migrants’ Remittances Using Propensity Score Matching: The Case of Tonga," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 88(282), pages 425-439, 09.
    2. Dean Yang, 2006. "International Migration, Remittances, and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," NBER Working Papers 12325, National Bureau of Economic Research, Inc.
    3. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 64(4), pages 605-54, October.
    4. John Anyanwu & Andrew E. O. Erhijakpor, 2010. "Do International Remittances Affect Poverty in Africa?," African Development Review, African Development Bank, African Development Bank, vol. 22(1), pages 51-91.
    5. Naneida Regina Lazarte Alcala & Lee C. Adkins & Bidisha Lahiri & Andreas Savvides, 2014. "Remittances and income diversification in Bolivia's rural sector," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 46(8), pages 848-858, March.
    6. Cox-Edwards, Alejandra & Rodríguez-Oreggia, Eduardo, 2009. "Remittances and Labor Force Participation in Mexico: An Analysis Using Propensity Score Matching," World Development, Elsevier, Elsevier, vol. 37(5), pages 1004-1014, May.
    7. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," NBER Working Papers 6699, National Bureau of Economic Research, Inc.
    8. Maurizio Bussolo & María Soledad Martínez Peria & César Calderón & Yira Mascaró & Mette E. Nielsen & Pablo Acosta & J. Humberto López & Çaglar Özden & Yoko Niimi & Luis Molina & Florencia Moiz, . "Remittances and Development: Lessons from Latin America," IDB Publications 59678, Inter-American Development Bank.
    9. Stark, Oded & Bloom, David E, 1985. "The New Economics of Labor Migration," American Economic Review, American Economic Association, American Economic Association, vol. 75(2), pages 173-78, May.
    10. Pablo Fajnzylber & J. Humberto López, 2008. "Remittances and Development : Lessons from Latin America," World Bank Publications, The World Bank, number 6911, August.
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