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

Abstract

Do remittances and social assistance have different impacts on household 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 nationally representative 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). This research highlights that income source matters and that different incomes may have different poverty impacts. In our sample, the two types of transfers are received by different, but to some extent 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.

Social grants, remittances, and food security: does the source of income matter?

“…When looking at the magnitude of the impact, however, remittances appear to have a larger poverty reduction effect, most likely due to a higher level of the transfer and the fact that in these specific case studies remittances are better targeted at poor households. In addition, Waidler et al (2016) compared the effects of remittances and social grants on expenditure patterns in Moldova and concluded that public and private transfers were not spent in the same way.…”

El impacto de las remesas internacionales en los gastos en salud de los hogares mexicanos

“…Acerca de las características económicas y sociales asociadas al hogar, se advierten discrepancias relevantes entre grupos: los hogares que reciben remesas presentan un mayor número de dependientes económicos. A su vez, los hogares receptores de remesas son en promedio más propensos a recibir beneficios del programa Oportunidades, lo cual podría invitar a pensar que las transferencias públicas y privadas son complementarias y no sustitutas, como lo explican Waidler et al (2017). Además, las características socioeconómicas adicionales indican que los hogares receptores de remesas se concentran en deciles de ingresos más bajos comparados con los no receptores.…”

New Light on the Remittances‐Poverty‐Health Nexus in Macedonia

“…At the empirical front, the welfare effects of remittances have been widely investigated. Petreski and Jovanovic (2013) make extensive reference to this strand of the literature: some papers date back to 1987, like Lucas, while others are quite recent, for example, Waidler et al (2017), suggesting that the topic of remittances has not lost of its appeal over the decades. However, the potential of remittances to act as informal social protection and insurance mechanisms in a broader sense has rarely been investigated.…”