Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/180456 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 11438
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper investigates the impact of remittances on poverty and inequality in Nigeria. In contrast to the existing literature, our methodology of instrumental variable quantile regression (IVQR) explicitly demonstrates the differential marginal impact of remittances for households at different levels of the conditional expenditure distribution. Furthermore, in tracing this heterogeneous impact, we are able to address the effect of remittances on poverty and inequality simultaneously in a unified econometric model. Our results reveal a positive marginal impact of remittances at all but the very highest quantiles of the conditional distribution of household expenditure, with the impact being the greatest up to the 12th quantile. While this unambiguously supports the poverty alleviation role of remittances hypothesized in the literature, the distributional impact is more nuanced: The marginal effect of remittance is seen to follow an approximate U-shape over the household expenditure distribution until the 89th quantile, whereupon it drops sharply. As such, households lying between the 13th to the 35th quantile gain far less from receiving remittances than households outside of this range.
Subjects: 
poverty
income inequality
migration
remittances
instrumental variable
quantile regression
JEL: 
F22
F24
O15
O55
Document Type: 
Working Paper

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