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The Effects of Remittances on Poverty at the Household Level in Bolivia: A Propensity Score Matching Approach

Author

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  • López-Videla, Bruno
  • Machuca, Carlos Emilio

Abstract

In the last few years, Bolivia has experienced a growing migration phenomenon. Many household members migrate from their homes in order to look for better opportunities and to improve their household income. In this paper, we aim to explore the effects of remittances on Bolivian household poverty levels. We use micro data from the 2008 Household Survey, conducted by the National Institute of Statistics (INE). We calculate propensity score matching estimators in order to address the potential bias due to heterogeneous factors in the sample. Then, we estimate the average treatment effect on the treated to compare the poverty level between households which receive and do not receive remittances. Results show that remittances have a positive effect on reducing urban households’ poverty level, whereas there is no effect on rural households’ poverty.

Suggested Citation

  • López-Videla, Bruno & Machuca, Carlos Emilio, 2014. "The Effects of Remittances on Poverty at the Household Level in Bolivia: A Propensity Score Matching Approach," MPRA Paper 55201, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:55201
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    File URL: https://mpra.ub.uni-muenchen.de/55201/1/MPRA_paper_55201.pdf
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    References listed on IDEAS

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    1. Wodon, Quentin & Angel-Urdinola, Diego & Gonzalez-Konig, Gabriel & Ojeda Revah, Diana & Siaens, Corinne, 2003. "Migration and Poverty in Mexico’s Southern States," MPRA Paper 10574, University Library of Munich, Germany.
    2. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 605-654.
    3. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, April.
    4. Stark, Oded & Bloom, David E, 1985. "The New Economics of Labor Migration," American Economic Review, American Economic Association, vol. 75(2), pages 173-178, May.
    5. 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.
    6. Pablo Fajnzylber & J. Humberto López, 2008. "Remittances and Development : Lessons from Latin America," World Bank Publications, The World Bank, number 6911, April.
    7. Eliana V. Jimenez-Soto & Richard P. C. Brown, 2012. "Assessing the Poverty Impacts of Migrants’ Remittances Using Propensity Score Matching: The Case of Tonga," The Economic Record, The Economic Society of Australia, vol. 88(282), pages 425-439, September.
    8. Naneida Regina Lazarte Alcala & Lee C. Adkins & Bidisha Lahiri & Andreas Savvides, 2014. "Remittances and income diversification in Bolivia's rural sector," Applied Economics, Taylor & Francis Journals, vol. 46(8), pages 848-858, March.
    9. Cox-Edwards, Alejandra & Rodríguez-Oreggia, Eduardo, 2009. "Remittances and Labor Force Participation in Mexico: An Analysis Using Propensity Score Matching," World Development, Elsevier, vol. 37(5), pages 1004-1014, May.
    10. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
    11. repec:idb:brikps:59678 is not listed on IDEAS
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    Cited by:

    1. Michael Coon, 2016. "Remittances and child labor in Bolivia," IZA Journal of Migration, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-26, December.

    More about this item

    Keywords

    Remittances; poverty; propensity score matching; Bolivia.;

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General

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