Scientific Papers

JOURNAL OF INTERNATIONAL STUDIES


© CSR, 2008-2013
ISSN: 2306-3483 (Online), 2071-8330 (Print)

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The effects of remittances on poverty alleviation in transition countries

Vol. 10, No 4, 2017

 

Drinka Peković

 

Higher School of Business Studies, Novi Sad

Serbia

drinkapekovic@yahoo.com

 

 

The effects of remittances on poverty alleviation in transition countries

 

 

 

 

 

 

 

 

Abstract. This paper examines the impact of remittances on poverty measures in transition economies using the panel data for the sample of nine countries in the period of 2002-2013. LSDV (Least Squares Dummy Variable) model with panel-corrected standard errors is used for estimation of remittance effects. The results show that remittances have a significant impact on each of the three poverty measures. Taking into consideration the endogenous regressor problem, a 10-percent increase in remittances per capita will lead to a decline, on average a 4.7 percent in poverty headcount, and also 5.2  percent in poverty depth and 5.8 percent in poverty severity. These results can be important for defining the policy measures on providing more efficient management of remittances.

 

Received: July, 2017

1st Revision: August, 2017

Accepted: November, 2017

 

DOI: 10.14254/2071-

8330.2017/10-4/2

 

JEL ClassificationF24, I32, C23

Keywordsremittances, poverty, transition countries, panel data analysis