The Impact of Remittances on Poverty and Human Capital: Evidence from Latin American Household Surveys

36 Pages Posted: 20 Apr 2016

See all articles by Pablo A. Acosta

Pablo A. Acosta

Corporacion Andina de Fomento

Pablo Fajnzylber

World Bank - Economic Development Institute; Federal University of Minas Gerais

Humberto Lopez

World Bank - Research Department

Date Written: June 1, 2007

Abstract

This paper explores the impact of remittances on poverty, education, and health in 11 Latin American countries using nationally representative household surveys and making an explicit attempt to account for one of the inherent costs associated with migration - the potential income that the migrant may have made at home. The main findings of the study are the following: (1) regardless of the counterfactual used remittances appear to lower poverty levels in most recipient countries; (2) yet despite this general tendency, the estimated impacts tend to be modest; and (3) there is significant country heterogeneity in the poverty reduction impact of remittances' flows. Among the aspects that have been identified in the paper that may lead to varying outcomes across countries are the percentage of households reporting remittances income, the share of remittances of recipient households belonging to the lowest quintiles of the income distribution, and the relative importance of remittances flows with respect to GDP. While remittances tend to have positive effects on education and health, this impact is often restricted to specific groups of the population.

Keywords: Population Policies, Remittances, Poverty Monitoring & Analysis, Pro-Poor Growth and Inequality, Small Area Estimation Poverty Mapping

Suggested Citation

Acosta, Pablo A. and Fajnzylber, Pablo R. and Lopez, Humberto, The Impact of Remittances on Poverty and Human Capital: Evidence from Latin American Household Surveys (June 1, 2007). World Bank Policy Research Working Paper No. 4247. Available at SSRN: https://ssrn.com/abstract=992396

Pablo A. Acosta

Corporacion Andina de Fomento ( email )

United States
58-212-209-6609 (Phone)

Pablo R. Fajnzylber

World Bank - Economic Development Institute ( email )

1818 H Street
Washington, DC 20433
United States

Federal University of Minas Gerais ( email )

Rua Curitiba, 832
CEDEPLAR 9 Andar
MG30170-120 Belo Horizonte
Brazil
+55 31 32799162 (Phone)

Humberto Lopez (Contact Author)

World Bank - Research Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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