Abstract:
This study researches the impact of international remittances on poverty
reduction in six former Soviet Union countries. The countries where personal inter national 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.