Remittances, Poverty Reduction and Inclusive Growth in the Resource-Poor Former Soviet Union Countries
Date Issued
2021
Author(s)
Gurbanov, Sarvar
Mammadrzayev, Vusal
Isgandar, Hasan
Abstract
This study researches the impact of international remittances on poverty
reduction in six former Soviet Union countries. The countries where personal international remittances are equal to more than 5% of GDP and rents from natural
resources are below 10% of GDP are selected as the units of measurement. This
study uses a fixed effect model with robust standard errors to reveal any types of
causality. According to the regression results, a 10% increase in remittance inflow
reduces headcount ratio, poverty gap, and poverty severity at $1.90 per day poverty
line by 4.8, 5.9 and 6.4%, respectively. In addition, the same level of increase in
remittances reduces poverty headcount ratio by 3.3% and poverty gap by 3.7% at
the poverty line of $3.20 per day. Additionally, pooled OLS regression results reveal
that remittance inflow has a negative impact on poverty level in the above-mentioned
six resource-poor countries.
reduction in six former Soviet Union countries. The countries where personal international remittances are equal to more than 5% of GDP and rents from natural
resources are below 10% of GDP are selected as the units of measurement. This
study uses a fixed effect model with robust standard errors to reveal any types of
causality. According to the regression results, a 10% increase in remittance inflow
reduces headcount ratio, poverty gap, and poverty severity at $1.90 per day poverty
line by 4.8, 5.9 and 6.4%, respectively. In addition, the same level of increase in
remittances reduces poverty headcount ratio by 3.3% and poverty gap by 3.7% at
the poverty line of $3.20 per day. Additionally, pooled OLS regression results reveal
that remittance inflow has a negative impact on poverty level in the above-mentioned
six resource-poor countries.