The Development Impact of Remittances in Latin America
By Pablo Fajnzylber and J. Humberto López, World Bank, November 2, 2006
The report analyzes the characteristics of households that are remittance recipients and how these characteristics affect the poverty-reducing impact of observed remittances flows. It also devotes significant attention to the macroeconomic impact of these flows, and explores policies and interventions aimed at enhancing the development impact of remittances in the region.
On the whole, the main messages that emerge from Close to Home are quite positive. Even though the estimated impact is moderate in most cases and country heterogeneity is very significant, higher remittances inflows tend to be associated with lower poverty levels and with improvements in human capital indicators (education and health) of the recipient countries. Remittances also seem to contribute to higher growth and investment rates and lower output volatility. Against this background, remittances are to be welcomed and actions that lower the cost of remitting and therefore attract additional flows should be encouraged.
>> View Article | created on: 11/02/2006
