Measuring Dynamic Effects of Remittances on Poverty and Inequality with Evidence from Kosovo. Issue 4 (3rd July 2020)

• Record Type: Journal Article
• Authors: Arapi-Gjini, Arjola; Möllers, Judith; Herzfeld, Thomas
• Is Part Of: Eastern European economics. Volume 58:Issue 4(2020)
• Page Start: 283
• Page End: 308
• Publication Date: 2020-07-03
• Subjects: Poverty -- inequality -- migration -- remittances -- dose-response function -- Kosovo; D10 -- D31 -- I32 -- I61; Europe, Eastern -- Economic conditions -- Periodicals; 330.947
• DOI: 10.1080/00128775.2020.1720517
• Languages: English
• ISSNs: 0012-8775

Abstract

ABSTRACT: This paper investigates dynamic effects of remittances on households' poverty and income distribution. Using state-of-the-art matching techniques, we measure impacts based on counterfactual scenarios, and make a step forward by applying for the first time a dose-response function approach to assess poverty effects due to variations in the time-length of receiving remittances. Our results suggest that remittances alleviate both absolute and relative poverty levels and lead to a marginal increase in inequality in the case of Kosovo. We further demonstrate that – although poverty reduction effects are stronger in the short-run – remittances have a positive poverty reduction effect over time. These findings have important welfare policy implications for low- and middle income economies with a high dependency on remittances.