Do International Remittances Stimulate Private Transfers? Panel Data Evidence from Ethiopia

Lisa Andersson, University of Gothenburg

International remittances can have important impacts on the households that receive them in the migrant origin country. The effects of remittances might reach beyond the households that directly receive the transfers and carry trickle-down effects on other households through informal systems of private transfers, however. Using rich panel data from urban Ethiopia spanning over more than a decade, we investigate how international remittances affect other types of transfers given out and received by the household. Using various panel data models that control for unobserved household heterogeneity, the results show that receiving international remittances increases the likelihood of sending internal transfers. We also find evidence of crowding-out effects on gifts received by the household when the household receives international remittances. The fact that remittances affect households beyond those who directly receive the remittances is an important finding, and it suggests that there are trickle-down effects that previously have been overlooked in the empirical literature. Our findings importantly indicate different channels though which remittances can affect the sending country.

About the speaker

Venue: Conference Room

Date: 08 May 2013

Time: 12:30 - 13:30