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Measuring Dynamic Effects of Remittances on Poverty and Inequality with Evidence from Kosovo

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  • Arjola Arapi-Gjini
  • Judith Möllers
  • Thomas Herzfeld

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.

Suggested Citation

  • Arjola Arapi-Gjini & Judith Möllers & Thomas Herzfeld, 2020. "Measuring Dynamic Effects of Remittances on Poverty and Inequality with Evidence from Kosovo," Eastern European Economics, Taylor & Francis Journals, vol. 58(4), pages 283-308, July.
    • Handle: RePEc:mes:eaeuec:v:58:y:2020:i:4:p:283-308
    DOI: 10.1080/00128775.2020.1720517
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    Cited by:

    1. MAWUSI, Charles, 2020. "Economic Uncertainty and Remittances Flow: Heterogeneity Matters," MPRA Paper 103097, University Library of Munich, Germany.
    2. Biljana Tashevska & Daniela Bojadjieva & Gunter Merdzan, 2023. "The Effects Of Remittances On Poverty And Inequality Alleviation In Selected Central And South-East European Countries," Shaping Post-COVID World – Challenges for Economic Theory and Policy, in: Aleksandra Praščević & Miomir Jakšić & Mihail Arandarenko & Dejan Trifunović & Milutin Ješić (ed.),Shaping Post-COVID World – Challenges for Economic Theory and Policy, chapter 9, pages 183-207, Faculty of Economics and Business, University of Belgrade.
    3. Selçuk Akçay, 2022. "Remittances and income inequality in the Philippines," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 36(1), pages 30-47, May.
    4. Shreya Pal & Muhammed Ashiq Villanthenkodath & Gupteswar Patel & Mantu Kumar Mahalik, 2022. "The impact of remittance inflows on economic growth, unemployment and income inequality: An international evidence," International Journal of Economic Policy Studies, Springer, vol. 16(1), pages 211-235, February.
    5. Coulibaly, Issiaka & Dembélé, Moustapha, 2024. "Impacts of remittances from internal and international migrants on poverty and inequality in Mali," International Economics, Elsevier, vol. 177(C).
    6. Charles Mawusi, 2021. "Economic Uncertainty and Remittances to Developing Economies: A System GMM Approach," Working Papers hal-03147813, HAL.
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    8. Charles Mawusi & Mohamed Abdallah & Mazhar Mughal, 2022. "Does Economic Uncertainty Foster Migrant Remittances? A Macro-Perspective from 53 Developing Countries," Working Papers hal-03725386, HAL.
    9. Titus Ayobami Ojeyinka & Cleopatra Oluseye Ibukun, 2024. "Do remittances mitigate poverty? Evidence from selected countries in Africa, Asia and Latin America," Economic Change and Restructuring, Springer, vol. 57(3), pages 1-28, June.

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    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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