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Measuring Dynamic Effects of Remittances on Poverty and Inequality with Evidence from Kosovo

Author

Listed:
  • Arjola Arapi-Gjini
  • Judith Möllers
  • Thomas Herzfeld

Abstract

This paper investigates dynamic effects of remittances on households’ poverty and income distribution. Using state-of-the-art matching techniques, we measure impacts based on counterfactual scenarios, and make a step forward by applying for the first time a dose-response function approach to assess poverty effects due to variations in the time-length of receiving remittances. Our results suggest that remittances alleviate both absolute and relative poverty levels and lead to a marginal increase in inequality in the case of Kosovo. We further demonstrate that – although poverty reduction effects are stronger in the short-run – remittances have a positive poverty reduction effect over time. These findings have important welfare policy implications for low- and middle income economies with a high dependency on remittances.

Suggested Citation

  • Arjola Arapi-Gjini & Judith Möllers & Thomas Herzfeld, 2020. "Measuring Dynamic Effects of Remittances on Poverty and Inequality with Evidence from Kosovo," Eastern European Economics, Taylor & Francis Journals, vol. 58(4), pages 283-308, July.
    • Handle: RePEc:mes:eaeuec:v:58:y:2020:i:4:p:283-308
    DOI: 10.1080/00128775.2020.1720517
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    Cited by:

    1. MAWUSI, Charles, 2020. "Economic Uncertainty and Remittances Flow: Heterogeneity Matters," MPRA Paper 103097, University Library of Munich, Germany.
    2. Biljana Tashevska & Daniela Bojadjieva & Gunter Merdzan, 2023. "The Effects Of Remittances On Poverty And Inequality Alleviation In Selected Central And South-East European Countries," Shaping Post-COVID World – Challenges for Economic Theory and Policy, in: Aleksandra Praščević & Miomir Jakšić & Mihail Arandarenko & Dejan Trifunović & Milutin Ješić (ed.),Shaping Post-COVID World – Challenges for Economic Theory and Policy, chapter 9, pages 183-207, Faculty of Economics and Business, University of Belgrade.
    3. Selçuk Akçay, 2022. "Remittances and income inequality in the Philippines," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 36(1), pages 30-47, May.
    4. Arapi‐Gjini, Arjola & Möllers, Judith & Herzfeld, Thomas, 2024. "Remitted euros are not equal: The complex spending behaviour of Kosovar households," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 62(6), pages 255-275.
    5. Amar Anwar & Colin F. Mang & Sonia Plaza, 2024. "Remittances and inequality: A meta‐analytic investigation," The World Economy, Wiley Blackwell, vol. 47(6), pages 2664-2705, June.
    6. repec:beo:swcetp:23-09 is not listed on IDEAS
    7. Nayab Karim & Muhammad Tariq & Muhammad Azam Khan, 2025. "Examining the Moderated-Mediation Role of the Financial Sector and Institutional Quality in the Relationship Between Remittances and Economic Growth in Developing Countries," Journal of International Migration and Integration, Springer, vol. 26(1), pages 279-316, March.
    8. Shreya Pal & Muhammed Ashiq Villanthenkodath & Gupteswar Patel & Mantu Kumar Mahalik, 2022. "The impact of remittance inflows on economic growth, unemployment and income inequality: An international evidence," International Journal of Economic Policy Studies, Springer, vol. 16(1), pages 211-235, February.
    9. Charles Mawusi & Mohamed Abdallah & Mazhar Mughal, 2022. "Does Economic Uncertainty Foster Migrant Remittances? A Macro-Perspective from 53 Developing Countries," Working Papers hal-03725386, HAL.
    10. Titus Ayobami Ojeyinka & Cleopatra Oluseye Ibukun, 2024. "Do remittances mitigate poverty? Evidence from selected countries in Africa, Asia and Latin America," Economic Change and Restructuring, Springer, vol. 57(3), pages 1-28, June.
    11. Matteo Masotti & Andrei Lucian Turlea & Matteo Vittuari, 2025. "The role of migration in post-soviet communities: the changing structure of rural livelihoods in Moldova," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-14, December.
    12. Coulibaly, Issiaka & Dembélé, Moustapha, 2024. "Impacts of remittances from internal and international migrants on poverty and inequality in Mali," International Economics, Elsevier, vol. 177(C).
    13. Charles Mawusi, 2021. "Economic Uncertainty and Remittances to Developing Economies: A System GMM Approach," Working Papers hal-03147813, HAL.
    14. Sima Rani Dey & Faroque Ahmed & Mohammad Tareque & Md. Moniruzzaman, 2024. "Impact of Returnee Remittances on Migrant Households’ Well-Being in Bangladesh," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(6), pages 1545-1572, December.
    15. Xue, Pengcheng & Liu, Hanzhen & Zhao, Delong & Liu, Jiaxin, 2024. "Mineral resources and equitable economic development: South Asian mineral resources policy perspective with innovation for resources efficiency," Resources Policy, Elsevier, vol. 96(C).

    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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