The Effects of International Remittances on Poverty and Inequality in Ethiopia

The article studies the effects of international remittances on poverty and inequality in Ethiopia using an urban household survey from 2004. Counterfactual consumption in the hypothetical case of no remittance is estimated in a selection-corrected estimation framework. Inequality and poverty values...

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Bibliographic Details
Published in:The Journal of development studies 2014-10, Vol.50 (10), p.1380-1396
Main Author: Beyene, Berhe Mekonnen
Format: Article
Language:English
Subjects:
Antipoverty Programs
Consumption
Ethiopia
Households
Inequality
Payments
Polls & surveys
Poverty
Poverty alleviation
Remittances
Transnationalism
Urban areas
Urban Poverty
Values
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Summary:The article studies the effects of international remittances on poverty and inequality in Ethiopia using an urban household survey from 2004. Counterfactual consumption in the hypothetical case of no remittance is estimated in a selection-corrected estimation framework. Inequality and poverty values in the hypothetical and actual cases are then compared. There is a significant reduction in poverty, while inequality does not change. The head count, the poverty gap and the squared poverty gap ratios decreased from 0.41 to 0.38, 0.14 to 0.13, and 0.064 to 0.057 respectively.
ISSN:0022-0388
1743-9140
DOI:10.1080/00220388.2014.940913