Do remittances and social assistance have different impacts on expenditure patterns of recipient households? The Moldovan Case

Jennifer Waidler, J.S. Hagen-Zanker, Franziska Gassmann, Melissa Siegel

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Do remittances and social assistance transfers have different impacts on household’s
expenditure patterns? While two separate strands of literature have looked at how
social assistance or remittances have been spent, few studies have compared them
directly. Using data from a household survey conducted in Moldova in 2011, this
paper assesses the impact both types of transfers have on household expenditure patterns. Contrary to the common assumption that money is fungible, we find that social
assistance and remittances have different impacts on expenditure patterns (having
controlled for potential endogeneity). In other words, where the income comes from
can determine how it is spent. As such, different sources of income may have
different poverty impacts. In our sample, the two types of transfers are received by
different, but slightly overlapping population groups. The fact that the two transfers
are spent in different ways means that, to some extent, social assistance and
remittances are complements rather than substitutes.
Original languageEnglish
Pages (from-to)355-375
JournalMigration & Development
Volume6
Issue number3
DOIs
Publication statusPublished - 2017

JEL classifications

  • f22 - International Migration
  • f24 - Remittances
  • j18 - Demographic Economics: Public Policy
  • i32 - Measurement and Analysis of Poverty
  • i38 - "Welfare and Poverty: Government Programs; Provision and Effects of Welfare Programs"
  • e21 - "Macroeconomics: Consumption; Saving; Wealth"
  • h50 - National Government Expenditures and Related Policies: General

Keywords

  • remittances
  • social assistance
  • expenditure patterns
  • Moldova

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