What is the Impact of International Remittances on Poverty and Inequality in Latin America?

36 Pages Posted: 20 Apr 2016

See all articles by Pablo A. Acosta

Pablo A. Acosta

Corporacion Andina de Fomento

César Calderón

World Bank

Pablo Fajnzylber

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

Humberto Lopez

World Bank - Research Department

Date Written: June 1, 2007

Abstract

Workers' remittances have become a major source of income for developing countries. However, little is still known about their impact on poverty and inequality. Using a large cross-country panel dataset, the authors find that remittances in Latin American and Caribbean (LAC) countries have increased growth and reduced inequality and poverty. These results are robust to the use of different instruments that attempt to correct for the potential endogeneity of remittances. Household survey-based estimates for 10 LAC countries confirm that remittances have negative albeit relatively small inequality and poverty-reducing effects, even after imputations for the potential home earnings of migrants.

Keywords: Population Policies, Remittances, Inequality, Pro-Poor Growth and Inequality, Poverty Impact Evaluation

Suggested Citation

Acosta, Pablo A. and Calderon, Cesar A. and Fajnzylber, Pablo R. and Lopez, Humberto, What is the Impact of International Remittances on Poverty and Inequality in Latin America? (June 1, 2007). World Bank Policy Research Working Paper No. 4249. Available at SSRN: https://ssrn.com/abstract=992985

Pablo A. Acosta

Corporacion Andina de Fomento ( email )

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

Cesar A. Calderon

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States
202-458-7214 (Phone)
202-522-7528 (Fax)

HOME PAGE: http://www.worldbank.org/laceconomist

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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