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Remittances after natural disasters: Evidence from the 2004 Indian tsunami

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  • Mitrut, Andreea

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Wolff, François-Charles

    (LEMNA, Université de Nantes and INED Paris)

Abstract

We examine the impact of the 2004 Indian tsunami on international remittance transfers using aggregate country data and synthetic control methodology. This procedure implies identifying the causal impact of the disaster by comparing the share of remittances to GDP in Indonesia, the country most affected by the shock, with a counterfactual group constructed using synthetic controls of countries that were not affected by the tsunami but that had a very similar pre-shock trend in international remittance flows. Our results indicate a large impact on remittances in Indonesia just after the tsunami, with 1.35 additional points in share of remittances to GDP in 2005 (compared to the synthetic control group). However, the gap in remittances observed between Indonesia and the synthetic control decreased steadily over the succeeding years and amounted to 0.5 percentage points in 2011.

Suggested Citation

  • Mitrut, Andreea & Wolff, François-Charles, 2014. "Remittances after natural disasters: Evidence from the 2004 Indian tsunami," Working Papers in Economics 604, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0604
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    File URL: https://gupea.ub.gu.se/handle/2077/36617
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    More about this item

    Keywords

    natural disasters; remittances; synthetic control; Indonesia;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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