Advertisement

Do Remittances Reduce Poverty in Developing Countries?

  • Costin-Alexandru CiupureanuEmail author
  • Mihai Daniel Roman
Chapter
Part of the Contributions to Economics book series (CE)

Abstract

Workers’ remittances represent a lifeline for the poor, increasing income for the families left behind. They represent an important link for the study of the impact of international migration in both origin and destination countries. This paper examines the effects of remittances on poverty in Poland, Romania, Ukraine and Turkey for the period 2002–2011. The results of the panel data analysis show that per capita official international remittances significantly reduce the level and depth of poverty in the analysed countries. A 10 % increase in per capita workers’ remittances will lead to a 5.3 % decline in the share of people living on less than $2 per person per day. Due to the use of informal channels for transferring money, an important share of remittances is left unrecorded. One possible way for the policymakers to deter the use of informal channels is by further creating incentives for lowering the costs for sending money back home. Also, better data and monitoring could bolster the rate of official remittances.

Keywords

International migration Remittances Poverty Panel data model 

JEL Classification Codes

F22 F24 I32 

Notes

Acknowledgements

This paper was co-financed from the European Social Fund, through the Sectorial Operational Programme Human Resources Development 2007–2013, project number POSDRU/159/1.5/S/138907 “Excellence in scientific interdisciplinary research, doctoral and postdoctoral, in the economic, social and medical fields-EXCELIS”, coordinator “The Bucharest University of Economic Studies”.

References

  1. Acosta P, Calderón C, Fajnzylber P, López H (2008) Do remittances lower poverty levels in Latin America? In: Fajnzylber P, López H (eds) Remittances and development, Lessons from Latin America. The World Bank, Washington, DC, pp 87–132CrossRefGoogle Scholar
  2. Adams R Jr, Page J (2005) Do international migration and remittances reduce poverty in developing countries? World Dev 33(10):1645–1669CrossRefGoogle Scholar
  3. Aydas OT, Metin-Ozcan K, Neyapti B (2005) Determinants of workers’ remittances: the case of Turkey. Emerg Mark Finance Trade 41(3):53–69Google Scholar
  4. Barajas A, Cosimano T, Fullenkamp C, Gapen M, Montiel P (2008) Macroeconomic consequences of remittances. International Monetary Fund, Washington, DCGoogle Scholar
  5. Barbone L, Pietka-Kosinska K, Topinska I (2012) The impact of remittances on Poland’s economy, vol 12. CASE-Center for Social and Economic ResearchGoogle Scholar
  6. Chami R, Jahjah S, Fullenkamp C (2003) Are immigrant remittance flows a source of capital for development. International Monetary Fund, Washington, DCGoogle Scholar
  7. Ciupureanu C, Roman M (2013) Remittances and economic growth. A case study on Romania. Proceedings of the 12th International Conference on Informatics in Economy Education, Research and Business Technologies, Bucharest, Romania, pp 511–515Google Scholar
  8. Demirguc-Kunt A, Martinez Peria MS, Aggarwal R (2006) Do workers’ remittances promote financial development? The World Bank, Washington, DCGoogle Scholar
  9. Elitok SP (2013) Remittance flows between Germany and Turkey: a reverse trend? Istanbul Policy Center, IstanbulGoogle Scholar
  10. Giuliano P, Ruiz-Arranz M (2009) Remittances, financial development and growth. J Dev Econ 90(1):144–152CrossRefGoogle Scholar
  11. Glazar O, Strielkowski PW, Weyskrabova B (2012) Migration and remittances in the CEECs: a case study of Ukrainian labour migrants in the Czech Republic. Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, No. 2012/19Google Scholar
  12. IMF (2012) World economic outlook. Coping with high debt and sluggish growth. International Monetary Fund, Washington, DCGoogle Scholar
  13. Karafolas S, Konteos G (2010) Choice of money transfer methods in the case of Albanian immigrants in Greece. Transit Stud Rev 16(4):962–978CrossRefGoogle Scholar
  14. Karafolas S, Sariannidis N (2009) The banking network as a transmission channel of migrant remittances: the case of Greek and Italian banks in Albania. Transit Stud Rev 15(4):674–684CrossRefGoogle Scholar
  15. Katsushi S, Gaiha R, Abdilahi A, Kaicker N (2011) Remittances, growth and poverty: new evidence from Asian countries. The School of Economics Discussion Paper Series (1125)Google Scholar
  16. Kim N (2007) The impact of remittances on labor supply: the case of Jamaica, vol 4120. World Bank, Washington, DCCrossRefGoogle Scholar
  17. McLeod D, Molina J (2005) Remittances, inequality and poverty reduction: some tests for Latin America. LACEA meetings paper proceedings. AUP Paris, FranceGoogle Scholar
  18. Ratha D (2013) The impact of remittances on economic growth and poverty reduction. Policy Brief no 8. Migration Policy InstituteGoogle Scholar
  19. Ratha D, Eigen-Zucchi C, Plaza S, Wyss H, Yi S (2013) Migration and remittances flows: recent trends and outlook, 2013–2016. Migration and Development Brief no. 21. The World BankGoogle Scholar
  20. Ratha D, Eigen-Zucchi C, Plaza S, Wyss H, Yi S (2014) Migration and remittances: recent trends and outlook. Migration and Development Brief no. 22. The World BankGoogle Scholar
  21. Roman M (2011) Romanians remittances and migration destination. Studii si cercetari de calcul economic si cibernetica economica 3–4:3–15Google Scholar
  22. Roman M (2013) Financial effects of the international migration in Europe: modelling the decision to remit. Panoeconomicus 60(4):541–555CrossRefGoogle Scholar
  23. Vasilescu MD, Roman M (2011) Internal migration and labour market in Romania – a regional approach. Reconect 3(2):142–149Google Scholar
  24. World Bank Group (ed) (2012) World development indicators 2012. World BankGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2016

Authors and Affiliations

  • Costin-Alexandru Ciupureanu
    • 1
    Email author
  • Mihai Daniel Roman
    • 2
  1. 1.Faculty of Cybernetics, Statistics and Economic InformaticsThe Doctoral School of The Bucharest University of Economic StudiesBucharestRomania
  2. 2.The Bucharest University of Economic StudiesBucharestRomania

Personalised recommendations