Do Foreign Remittances Matter to Poverty and Inequality? Evidence from Vietnam

Abstract

Empirical findings on the impacts of international remittances on poverty and inequality have not been consistent. This paper uses fixed-effect regression to estimate the impacts of foreign remittances on income and consumption of remittances-receiving households, and subsequently investigate the impacts of foreign remittances on poverty and inequality in Vietnam. It is found that receiving foreign remittances has increased household income and consumption remarkably, but decreased poverty slightly for the remittance recipients. In addition, foreign remittances have increased inequality, albeit at a small magnitude.