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Assessing the poverty impacts of remittances with alternative counterfactual income estimates

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We estimate the impacts of remittances on poverty with survey data from Tonga, a poor Pacific island country highly dependent on international migrants’ remittances. The sensitivity of poverty impacts to estimation method is tested using two methods to estimate migrants’ counterfactual incomes; bootstrap prediction with self-selection testing and propensity score matching. We find consistency between the two methods, both showing a substantial reduction in the incidence and depth of poverty with migration and remittances. With further robustness checks there is strong evidence that the poorest households benefit from migrants’ remittances, and that increased migration opportunities can contribute to poverty alleviation.

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Paper provided by School of Economics, University of Queensland, Australia in its series Discussion Papers Series with number 375.

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Date of creation: 2008
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Handle: RePEc:qld:uq2004:375

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Cited by:
  1. Richard Brown & Gareth Leeves & Prabha Prayaga, 2012. "An analysis of recent survey data on the remittances of Pacific island migrants in Australia," Discussion Papers Series 457, School of Economics, University of Queensland, Australia.

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