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

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

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.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 50313.

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Date of creation: 20 Dec 2009
Date of revision:
Handle: RePEc:pra:mprapa:50313
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  1. 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.
  2. Edgar R. Rodriguez, 1996. "International Migrants' Remittances in the Philippines," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 427-32, April.
  3. Niimi, Yoko & Pham, Thai Hung & Reilly, Barry, 2008. "Determinants of remittances : recent evidence using data on internal migrants in Vietnam," Policy Research Working Paper Series 4586, The World Bank.
  4. 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.
  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, 08.
  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. 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.
  8. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
  9. Cuong Nguyen Viet, 2008. "Do Foreign Remittances Matter to Poverty and Inequality? Evidence from Vietnam," Economics Bulletin, AccessEcon, vol. 15(1), pages 1-11.
  10. 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.
  11. World Bank, 2008. "The Migration and Remittances Factbook 2008," World Bank Publications, The World Bank, number 6383.
  12. 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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