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International Remittances and Private Interhousehold Transfers: Exploring the Links

  • Yonas AlemEmail author
  • Lisa Andersson
Original Article
  • 13 Downloads

Abstract

We investigate the effect of international remittances from migrated family members on informal interhousehold transfers—an issue that has received limited attention in the literature. Using rich panel data from urban Ethiopia spanning 15 years, we show that receiving international remittances increases the value of private domestic interhousehold transfers, whereas receiving domestic remittances does not have any effect. We also show that the transfers sent respond to shocks to a great extent. Our results provide new evidence on the trickle-down effects of international remittances, effects important to consider when analyzing the impact of international remittances on household outcomes in recipient countries.

Keywords

International remittances Interhousehold transfers Urban Ethiopia Panel data Shocks 

Résumé

Nous étudions l’effet des transferts de fonds internationaux des membres de famille immigrés sur les transferts informels entre les ménages - une question qui a reçu peu d’attention dans la littérature. En utilisant de riches données de panel de l’Ethiopie urbaine sur 15 ans, nous montrons que la réception des transferts de fonds internationaux augmente la valeur des transferts domestiques privés entre les ménages, alors que la réception des transferts domestiques ne produit aucun effet. Nous montrons également que les transferts émis répondent dans une large mesure aux chocs. Nos résultats fournissent de nouvelles preuves sur les effets d’entraînement des transferts de fonds internationaux, effets importants à prendre en compte dans l’analyse de l’impact des transferts de fonds internationaux sur les ménages dans les pays bénéficiaires.

Notes

Acknowledgements

We thank two anonymous reviewers, Arne Bigsten, Andreea Mitrut, Kristina Mohlin, Haileselassie Medhin, and seminar participants at the Department of Economics, University of Gothenburg, for helpful comments on earlier versions of the paper. Financial support from the Swedish International Development Agency (Sida) through the Environment for Development Initiative (EfD), and from the Gothenburg Center of Globalization and Development, University of Gothenburg, is gratefully acknowledged.

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.

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Copyright information

© European Association of Development Research and Training Institutes (EADI) 2019

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of GothenburgGothenburgSweden
  2. 2.Maastricht Graduate School of Governance/UNU-MeritMaastrichtNetherlands

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