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Do remittances and social assistance have different impacts on expenditure patterns of recipient households?: The Moldovan case

Author

Listed:
  • Waidler, J.

    (UNU-MERIT)

  • Hagen-Zanker, J.

    (Overseas Development Institute (ODI))

  • Gassmann, F.

    (UNU-MERIT)

  • Siegel, M.

    (UNU-MERIT)

Abstract

Do remittances and social assistance have different impacts on household expenditure patterns? While two separate strands of literature have looked at how social assistance or remittances have been spent, few studies have compared them directly. Using data from a nationally representative household survey conducted in Moldova in 2011, this paper assesses the impact both types of transfers have on household expenditure patterns. Contrary to the common assumption that money is fungible, we find that social assistance and remittances have different impacts on expenditure patterns having controlled for potential endogeneity. This research highlights that income source matters and that different incomes may have different poverty impacts. In our sample, the two types of transfers are received by different, but to some extent overlapping population groups. The fact that the two transfers are spent in different ways means that, to some extent, social assistance and remittances are complements rather than substitutes.

Suggested Citation

  • Waidler, J. & Hagen-Zanker, J. & Gassmann, F. & Siegel, M., 2014. "Do remittances and social assistance have different impacts on expenditure patterns of recipient households?: The Moldovan case," MERIT Working Papers 2014-072, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2014072
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    File URL: https://unu-merit.nl/publications/wppdf/2014/wp2014-072.pdf
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    References listed on IDEAS

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    1. Marrit Van den Berg & Nguyen Viet Cuong, 2011. "Impact of Public and Private Cash Transfers on Poverty and Inequality: Evidence from Vietnam," Development Policy Review, Overseas Development Institute, vol. 29(6), pages 689-728, November.
    2. Marilena Giannetti & Daniela Federici & Michele Raitano, 2009. "Migrant remittances and inequality in Central-Eastern Europe," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(3), pages 289-307.
    3. Hernandez-Hernandez, Emilio & Sam, Abdoul G. & Gonzalez-Vega, Claudio & Chen, Joyce J., 2012. "Does the insurance effect of public and private transfers favor financial deepening? evidence from rural Nicaragua," MPRA Paper 38339, University Library of Munich, Germany.
    4. Maitra, Pushkar & Ray, Ranjan, 2003. "The effect of transfers on household expenditure patterns and poverty in South Africa," Journal of Development Economics, Elsevier, vol. 71(1), pages 23-49, June.
    5. Amelia Branczik & Julian A. Lampietti & Sudeshna Ghosh Banerjee, 2007. "People and Power : Electricity Sector Reforms and the Poor in Europe and Central Asia," World Bank Publications - Books, The World Bank Group, number 7175, April.
    6. Gassmann, Franziska, 2014. "Switching the lights off: The impact of energy tariff increases on households in the Kyrgyz Republic," Journal of Comparative Economics, Elsevier, vol. 42(3), pages 755-769.
    7. Duflo, Esther & Udry, Christopher R., 2003. "Intrahousehold Resource Allocation in Cote D'Ivoire: Social Norms, Separate Accounts and Consumption Choices," Center Discussion Papers 28404, Yale University, Economic Growth Center.
    8. World Bank, 2011. "Migration and Remittances Factbook 2011 : Second Edition," World Bank Publications - Books, The World Bank Group, number 2522, April.
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    Cited by:

    1. Jieun Choi & Mark Dutz & Zainab Usman, 2020. "The Future of Work in Africa [L’avenir du travail en Afrique]," World Bank Publications - Books, The World Bank Group, number 32124, April.
    2. Jennifer Waidler & Stephen Devereux, 2019. "Social grants, remittances, and food security: does the source of income matter?," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 11(3), pages 679-702, June.
    3. Waidler, Jennifer, 2016. "On the fungibility of public and private transfers: A mental accounting approach," MERIT Working Papers 2016-060, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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    Keywords

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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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