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Topic 13 Remittances, Poverty and Inequality A number of studies have examined the impact of international remittances on poverty and inequality in developing countries. Since international remittances often represent 30 to 40 percent of migrant household incomes, and incomes earned working abroad are typically times higher than those earned at home, most studies have found that remittances tend to reduce poverty in the developing world.
However, the impact of international remittances on income inequality is more controversial. Since international migrants generally come from the higher ends of the income distribution, most studies find that remittances lead to a slight increase in income inequality.
However, some studies suggest that the negative impact of remittances on income distribution is not inevitable, and may dissipate over time if migration opportunities reach all income classes.
In perhaps the broadest study, Adams and Page use the results of household surveys in 71 developing countries to analyze the impact of international migration and remittances on poverty. To control for reverse causality, the paper employs an instrumental variables approach.
The authors find that, on average, a 10 percent increase in international remittances in a developing country will lead to a 3. They also find that, on average, a 10 percent increase in the share of international migrants from a developing country will lead to a 2.
They find that international remittances have reduced poverty in Latin America by 0.
At the country level, various studies by Lokshin et al in Nepal and Adams in Ghana have also found that international migration and remittances reduce poverty.
Using a maximum likelihood estimation that simulates counterfactuals for various migration scenarios, Lokshin et al finds that almost 20 percent of the decline in poverty in Nepal can be attributed to increased internal and international migration.
Similarly, in Ghana Adams finds that both internal and international remittances have reduced the level, depth and severity of poverty.
On the issue of inequality, many studies find that international remittances tend to increase income inequality. The reason for this finding is cost: They find that when remittances are included in household income the Gini coefficient rises by between 12 and 15 percent the Gini coefficient is a standard measure of income inequality, scaled between 0 and 1, with 1 being complete inequality.
Using the same counterfactual approach for imputing incomes in Ghana, Adams also finds that when international remittances are included in household income the Gini coefficient increases by about 3 percent: However, these findings are challenged by studies in Mexico by McKenzie and Rapoport and Jones According to McKenzie and Rapoportthe nature of migrant selectivity changes over time.
In communities with low levels of international migration, the initial effect of international migration is to increase inequality, but as levels of migration increase, international migration tends to reduce income inequality. Similarly, Jones finds that as international migration increases, rural income distribution improves relative to urban income distribution, since most remittances are targeted to rural areas.
Remittances and Development in Latin America. World Economy 29 7: Publisher Link This paper uses nationally-representative household surveys from 10 Latin American countries to examine the effect of international remittances on poverty and inequality.
The authors find that simple OLS regressions show that remittances have no statistical effect on poverty in Latin America. However, since these results may suffer from endogeneity bias, the authors re-estimate the regressions using an IV approach. Using this new approach, the authors find that remittances have reduced the poverty headcount in Latin America by about 0.
On inequality, they find that remittances have only a small impact on income inequality in Latin America.
Remittances and Poverty in Ghana. Since remittances may be endogenous to household income, the author estimates counterfactual incomes for migrants had they stayed and worked at home. Results suggest that both internal remittances from Ghana and international remittances from African and other countries reduce the level, depth and severity of poverty in Ghana.
On inequality, results suggest that when international remittances are included in household income the Gini coefficient rises by about 3 percent: World Development 33 This study uses results from nationally-representative household surveys in 71 developing countries to analyze the impact of international migration and remittances on poverty in the developing world.
Since international migration and remittances may be endogenous to poverty outcomes, the paper uses an instrumental variables approach. Results suggest that a 10 percent increase in international migration from a country will lead to a 2.
Barham, Bradford, and Stephen Boucher. Migration, Remittances and Inequality: Journal of Development Economics 55 3: This study uses a small, non-representative household survey of households in Nicaragua to examine the effects of international migration on income distribution.
The authors find that when the observed income distribution is compared with two no-migration counterfactual situations, income inequality is higher when international remittances are included in household income.
Specifically, when remittances are included in household income, and compared to the two no-migration counterfactual situations, the Gini coefficient rises by between 12 and 15 percent: Economic Geography 74 1:THE IMPACT OF MIGRANT REMITTANCES ON POVERTY REDUCTION IN SELECTED AFRICAN COUNTRIES, Free Undergraduate Project Topics, Research Materials, Education project topics, Economics project topics, computer science project topics, Hire a data analyst.
Before starting you must find the exact material you want to touch base on, this can range from many different topics when it comes to poverty.
Related examples include how to end poverty, causes of poverty, poverty in children and many others. Human Trafficking in Houston - Human trafficking is a significant, but hard to spot problem in Houston – and across Texas.
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Remittances Do Not Solve the Problems of Poverty and Development (Essay Sample) Instructions: the essay is on the issue of remittance, and sample paper argues that Remittances Do Not Solve the Problems of Poverty and Development. It is a pleasure to receive the inaugural issue of a new journal Migration and Development published by Routledge.
While many journals are publishing articles on migration and development and a few are exclusively dedicated to the topic of migration, this new journal has the potential to comprehensively introduce more development into .
Since international remittances often represent 30 to 40 percent of migrant household incomes, and incomes earned working abroad are typically times higher than those earned at home, most studies have found that remittances tend to reduce poverty in the developing world.