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The Impact of International Remittances on Income, Work Efforts, Poverty and Inequality: Evidence from Vietnam

Author

Listed:
  • Nguyen, Cuong
  • van den Berg, Marrit
  • Lensink, Robert

Abstract

This study provides new empirical evidence on the impact of international remittances. Using data from the two most recent Vietnam Household and Living Standard Surveys, the paper estimates the effect of remittances on per capita income, per capita expenditure, work efforts, poverty and inequality. The estimates suggest that a rise in international remittances in Vietnam increases household income and expenditure. Yet, the study also finds evidence that international remittances may create a moral hazard problem by inducing disincentives to work. Moreover, the study suggests that international remittances, at the least in the short run, do not reduce poverty. They may even lead to an increase in inequality. Overall, the study casts doubts on the view that international remittances may play a crucial role in reducing poverty in developing countries.

Suggested Citation

  • Nguyen, Cuong & van den Berg, Marrit & Lensink, Robert, 2009. "The Impact of International Remittances on Income, Work Efforts, Poverty and Inequality: Evidence from Vietnam," MPRA Paper 50313, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:50313
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    File URL: https://mpra.ub.uni-muenchen.de/50313/1/MPRA_paper_50313.pdf
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    References listed on IDEAS

    as
    1. Yoko Niimi & Thai Hung Pham & Barry Reilly, 2009. "Determinants of Remittances: Recent Evidence Using Data on Internal Migrants in Vietnam," Asian Economic Journal, East Asian Economic Association, vol. 23(1), pages 19-39, March.
    2. repec:dau:papers:123456789/5126 is not listed on IDEAS
    3. John Anyanwu & Andrew E. O. Erhijakpor, 2010. "Do International Remittances Affect Poverty in Africa?," African Development Review, African Development Bank, vol. 22(1), pages 51-91.
    4. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
    5. Cristina Cattaneo, 2009. "International Migration, the Brain Drain and Poverty: A Cross-country Analysis," The World Economy, Wiley Blackwell, vol. 32(8), pages 1180-1202, August.
    6. Richard H. Adams, 2006. "International Remittances and the Household: Analysis and Review of Global Evidence," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(2), pages 396-425, December.
    7. Edgar R. Rodriguez, 1996. "International Migrants' Remittances in the Philippines," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 427-432, April.
    8. Cuong Nguyen Viet, 2008. "Do Foreign Remittances Matter to Poverty and Inequality? Evidence from Vietnam," Economics Bulletin, AccessEcon, vol. 15(1), pages 1-11.
    9. Jean-Paul Azam & Flore Gubert, 2006. "Migrants' Remittances and the Household in Africa: A Review of Evidence," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(2), pages 426-462, December.
    10. World Bank, 2008. "The Migration and Remittances Factbook 2008," World Bank Publications, The World Bank, number 6383.
    11. Cox, Donald & Eser, Zekeriya & Jimenez, Emmanuel, 1998. "Motives for private transfers over the life cycle: An analytical framework and evidence for Peru," Journal of Development Economics, Elsevier, vol. 55(1), pages 57-80, February.
    12. Alejandra Cox Edwards & Manuelita Ureta, 2003. "International Migration, Remittances, and Schooling: Evidence from El Salvador," NBER Working Papers 9766, National Bureau of Economic Research, Inc.
    13. Edgard R. Rodriguez & Susan Horton, 1995. "International Return Migration and Remittances in the Philippines," Working Papers horton-95-01, University of Toronto, Department of Economics.
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    Citations

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    Cited by:

    1. Nguyen, Cuong & Nguyen, Hoa, 2013. "Do Internal and International Remittances Matter to Health, Education and Labor of Children? The Case of Vietnam," MPRA Paper 48672, University Library of Munich, Germany.
    2. Nguyen, Cuong, 2012. "Does Urbanization Help Poverty Reduction in Rural Areas?Evidence from a Developing Country," MPRA Paper 48660, University Library of Munich, Germany.

    More about this item

    Keywords

    Remittances; poverty; expenditure; income; household survey; Vietnam;

    JEL classification:

    • F3 - International Economics - - International Finance
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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