| Abstract: |
This paper examines the economic impact of international remittances on
countries and households in the developing world. To analyze the country-level
impact of remittances, the paper estimates an econometric model based on a new
data set of 115 developing countries. Results suggest that countries located
close to a major remittance-sending region (like the United States,
OECD-Europe) are more likely to receive international remittances, and that
while the level of poverty in a country has no statistical effect on the
amount of remittances received, for those countries which are fortunate enough
to receive remittances, these resource flows do tend to reduce the level and
depth of poverty. At the household level, a review of findings from recent
research suggest that households receiving international remittances spend
less at the margin on consumption goods-like food-and more on investment
goods-like education and housing. Households receiving international
remittances also tend to invest more in entrepreneurial activities. |