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What is the impact of international remittances on poverty and inequality in Latin America ?

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Author Info
Acosta, Pablo
Calderon, Cesar
Fajnzylber, Pablo
Lopez, Humberto

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Abstract

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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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4249.

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Date of creation: 01 Jun 2007
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Handle: RePEc:wbk:wbrwps:4249

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Related research
Keywords: Population Policies; Remittances; Inequality; Achieving Shared Growth; Poverty Impact Evaluation;

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  1. Garcia-Fuentes, Pablo A. & Kennedy, P. Lynn, 2009. "Remittances and economic growth in Latin America and the Caribbean: The Impact of the human capital development," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46751, Southern Agricultural Economics Association. [Downloadable!]
  2. Ziesemer, Thomas, 2009. "The Impact of the Credit Crisis on Poor Developing Countries: Growth, worker remittances, accumulation and migration," UNU-MERIT Working Paper Series 026, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  3. Ramirez, Miguel D. & Sharma, Hari, 2008. "Remittances and Growth in Latin America: A Panel Unit Root and Panel Cointegration Analysis," Working Papers 51, Yale University, Department of Economics. [Downloadable!]
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  4. Pablo A. Acosta & Emmanuel K.K. Lartey & Federico S. Mandelman, 2007. "Remittances and the Dutch disease," Working Paper 2007-08, Federal Reserve Bank of Atlanta. [Downloadable!]
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  5. Lopez, Humberto & Molina, Luis & Bussolo, Maurizio, 2007. "Remittances and the real exchange rate," Policy Research Working Paper Series 4213, The World Bank. [Downloadable!]
  6. Emmanuel K.K. Lartey & Federico S. Mandelman & Pablo A. Acosta, 2008. "Remittances, exchange rate regimes, and the Dutch disease: a panel data analysis," Working Paper 2008-12, Federal Reserve Bank of Atlanta. [Downloadable!]
  7. Elisabetta Lodigiani, 2009. "Diaspora Externalities as a Cornerstone of the New Brain Drain Literature," Development Working Papers 277, Centro Studi Luca d\'Agliano, University of Milano. [Downloadable!]
  8. Houle, René & Schellenberg, Grant, 2008. "Remittance Behaviours Among Recent Immigrants in Canada," Analytical Studies Branch Research Paper Series 2008312e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
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