IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v10y2022i9p223-d914181.html
   My bibliography  Save this article

The Impact of Remittances on Saving Behaviour and Expenditure Patterns in Vietnam

Author

Listed:
  • Thanh Xuan Hua

    (Department of Economics, College of Economics, Can Tho University, Can Tho City 94000, Vietnam)

  • Roselinde Kessels

    (Department of Data Analytics and Digitalization, Maastricht University, P.O. Box 616, 6200 MD Maastricht, The Netherlands
    Department of Economics, University of Antwerp, Prinsstraat 13, 2000 Antwerp, Belgium)

  • Guido Erreygers

    (Department of Economics, University of Antwerp, Prinsstraat 13, 2000 Antwerp, Belgium
    Centre for Health Policy, University of Melbourne, 207 Bouverie Street, Carlton, VIC 3010, Australia)

Abstract

We examine the effects of receiving remittances on household saving behaviour and expenditure patterns in Vietnam. We consider the amount of saving, the saving rate, and the share of expenditure, as well as per capita expenditure on education, health, assets, house repairs, food, non-food, and utilities. We apply propensity score matching to data from the Vietnam Household Living Standard Survey (VHLSS) of 2012. We find that remittances have a positive impact on household savings and increase both the amount of saving and the saving rate. As far as expenditure patterns are concerned, our results indicate that receiving households spend more on health, assets, and house repairs, and less on food. This finding suggests that households tend to use remittances productively, with receiving households increasing their investments in human and physical capital. For the economy as a whole, remittances can create more opportunities for the development of services provided by banks, financial institutions, hospitals and healthcare centres, and give incentives to the production of building materials and tangible assets.

Suggested Citation

  • Thanh Xuan Hua & Roselinde Kessels & Guido Erreygers, 2022. "The Impact of Remittances on Saving Behaviour and Expenditure Patterns in Vietnam," Economies, MDPI, vol. 10(9), pages 1-19, September.
  • Handle: RePEc:gam:jecomi:v:10:y:2022:i:9:p:223-:d:914181
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/10/9/223/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2227-7099/10/9/223/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Angus Deaton, 2019. "The Analysis of Household Surveys," World Bank Publications - Books, The World Bank Group, number 30394.
    2. Démurger, Sylvie & Wang, Xiaoqian, 2016. "Remittances and expenditure patterns of the left behinds in rural China," China Economic Review, Elsevier, vol. 37(C), pages 177-190.
    3. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants’ Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, April.
    4. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6, National Bureau of Economic Research, Inc.
    5. Adams Jr., Richard H. & Cuecuecha, Alfredo, 2010. "Remittances, Household Expenditure and Investment in Guatemala," World Development, Elsevier, vol. 38(11), pages 1626-1641, November.
    6. Nguyen Viet Cuong & Vu Hoang Linh, 2018. "The Impact of Migration and Remittances on Household Welfare: Evidence from Vietnam," Journal of International Migration and Integration, Springer, vol. 19(4), pages 945-963, November.
    7. Taylor, J. Edward & Mora, Jorge, 2006. "Does migration reshape expenditures in rural households? Evidence from Mexico," Policy Research Working Paper Series 3842, The World Bank.
    8. David McKenzie & John Gibson & Steven Stillman, 2010. "How Important Is Selection? Experimental vs. Non-Experimental Measures of the Income Gains from Migration," Journal of the European Economic Association, MIT Press, vol. 8(4), pages 913-945, June.
    9. Aggarwal, Reena & Demirgüç-Kunt, Asli & Pería, Maria Soledad Martínez, 2011. "Do remittances promote financial development?," Journal of Development Economics, Elsevier, vol. 96(2), pages 255-264, November.
    10. Nguyen Viet, Cuong, 2008. "Impacts of International and Internal Remittances on Household Welfare: Evidence from Viet Nam," MPRA Paper 25770, University Library of Munich, Germany.
    11. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
    12. Deaton, Angus S & Ruiz-Castillo, Javier & Thomas, Duncan, 1989. "The Influence of Household Composition on Household Expenditure Patterns: Theory and Spanish Evidence," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 179-200, February.
    13. Adriana Castaldo & Barry Reilly, 2007. "Do Migrant Remittances Affect the Consumption Patterns of Albanian Households?," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 5(1), pages 25-44.
    14. Randazzo, Teresa & Piracha, Matloob, 2019. "Remittances and household expenditure behaviour: Evidence from Senegal∗," Economic Modelling, Elsevier, vol. 79(C), pages 141-153.
    15. repec:phd:pjdevt:pjd_2008_vol__xxxv_no__2-e is not listed on IDEAS
    16. Mohammed Ziaul Haider & Tanbir Hossain & Ohidul Islam Siddiqui, 2016. "Impact of Remittance on Consumption and Savings Behavior in Rural Areas of Bangladesh," Journal of Business, LAR Center Press, vol. 1(4), pages 25-34, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Randazzo, Teresa & Piracha, Matloob, 2019. "Remittances and household expenditure behaviour: Evidence from Senegal∗," Economic Modelling, Elsevier, vol. 79(C), pages 141-153.
    2. Chuhong Wang & Xingfei Liu & Zizhong Yan, 2021. "Temporary versus permanent migration: The impact on expenditure patterns of households left behind," Review of Economics of the Household, Springer, vol. 19(3), pages 873-911, September.
    3. Démurger, Sylvie & Wang, Xiaoqian, 2016. "Remittances and expenditure patterns of the left behinds in rural China," China Economic Review, Elsevier, vol. 37(C), pages 177-190.
    4. Bui, Thi Thanh Nga & Le, Thi Thanh Ngan & Daly, Kevin James, 2015. "Microlevel impacts of remittances on household behavior: Viet Nam case study," Emerging Markets Review, Elsevier, vol. 25(C), pages 176-190.
    5. Azizbek Tokhirov, 2018. "Remittances and subjective well-being of the left behinds in Tajikistan," Economics Bulletin, AccessEcon, vol. 38(4), pages 1735-1747.
    6. Ambrosius, Christian, 2012. "Are remittances a substitute for credit? Carrying the financial burden of health shocks in national and transnational households," Discussion Papers 2012/9, Free University Berlin, School of Business & Economics.
    7. Teresa Randazzo & Filippo Pavanello & Enrica De Cian, 2021. "Adaptation to climate change: air-conditioning and the role of remittances," Working Papers 2021:, Department of Economics, University of Venice "Ca' Foscari".
    8. Grabrucker, Katharina, 2021. "Effects of internal rural-urban migration on rural non-farm enterprises: Evidence from Thailand and Vietnam," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-85-21, University of Passau, Faculty of Business and Economics.
    9. Junaid Ahmed & Mazhar Mughal & Stephan Klasen, 2018. "Great Expectations? Remittances and Asset Accumulation in Pakistan," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(3), pages 507-532, April.
    10. Michael A. Clemens & Timothy N. Ogden, 2020. "Migration and household finances: How a different framing can improve thinking about migration," Development Policy Review, Overseas Development Institute, vol. 38(1), pages 3-27, January.
    11. Joseph B. Ajefu & Joseph O. Ogebe, 2021. "The effects of international remittances on expenditure patterns of the left‐behind households in Sub‐Saharan Africa," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 405-429, February.
    12. Michael Clemens and Timothy N. Ogden, 2014. "Migration as a Strategy for Household Finance: A Research Agenda on Remittances, Payments, and Development- Working Paper 354," Working Papers 354, Center for Global Development.
    13. Junaid Ahmed & Mazhar Mughal & Stephan Klasen, 2018. "Great Expectations? Remittances and Asset Accumulation in Pakistan," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(3), pages 507-532, April.
    14. Kabinet Kaba & Mahamat Moustapha, 2021. "Remittances and firm performance in sub-Saharan Africa: evidence from firm-level data," Working Papers DT/2021/07, DIAL (Développement, Institutions et Mondialisation).
    15. Ma, Yechi & Chen, Zhiguo & Shinwari, Riazullah & Khan, Zeeshan, 2021. "Financialization, globalization, and Dutch disease: Is Dutch disease exist for resources rich countries?," Resources Policy, Elsevier, vol. 72(C).
    16. Björn NILSSON, 2019. "Education and migration: insights for policymakers," Working Paper 23ca9c54-061a-4d60-967c-f, Agence française de développement.
    17. Aubrey D. Tabuga, 2007. "International Remittances and Household Expenditures : The Philippine Case," Development Economics Working Papers 22698, East Asian Bureau of Economic Research.
    18. Clot, Sophie & Andriamahefazafy, Fano & Grolleau, Gilles & Ibanez, Lisette & Méral, Philippe, 2015. "Compensation and Rewards for Environmental Services (CRES) and efficient design of contracts in developing countries. Behavioral insights from a natural field experiment," Ecological Economics, Elsevier, vol. 113(C), pages 85-96.
    19. Mishra, Khushbu & Kondratjeva, Olga & Shively, Gerald E., 2022. "Do remittances reshape household expenditures? Evidence from Nepal," World Development, Elsevier, vol. 157(C).
    20. Cynthia Bansak & Brian Chezum & Animesh Giri, 2015. "Remittances, school quality, and household education expenditures in Nepal," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-19, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:10:y:2022:i:9:p:223-:d:914181. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.