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Migration and Remittances in Emerging Market Economies of Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?. Arnoldshain Seminar XI “Migration, Development, & Demographic Change – Problems, Consequences, Solutions”. Mulubrhan Amare (with Herman Waibel & Lena Hohfeld )

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Migration and Remittances in Emerging Market Economies of Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?

Arnoldshain Seminar XI

“Migration, Development, & Demographic Change –

Problems, Consequences, Solutions”

Mulubrhan Amare

(with Herman Waibel & Lena Hohfeld )

Institute of Development and Agricultural Economics, School of Economics & Management, Leibniz Universität Hannover, Germany


Outline
Outline Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?

  • Background

  • Objectives

  • Conceptual framework

  • Data description

  • Econometric approach

  • Results

  • Summary & conclusions


Background Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?

  • Motivation (I)

  • The share of remittances to total income growing in many developing countries.

  • More than 30-40% rural income from remittances (Nguyen et al., 2007)

  • Evidences on poverty reduction and inequality impact is mixed

    • Migrant in low quality employment

    • Remittances may spend for consumption

  • Increase inequality in the community of origin

Background Objectives Conceptual framework Data Econometric approach Results Conclusions


Background Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?

  • Motivation (II)

  • Limitations on the impact of migration and remittances

    • Do not distinguish whether remittances lead to structural transition due to asset growth or

    • Stochastic transition due to apparent higher income

    • Overestimation of poverty transition impact of migration & remittances

  • To learn the impact of migration on structural transitions, asset based approach is used

    • Suitable for identifying structural impacts of migration and forward-looking policy

Background Objectives Conceptual framework Data Econometric approach Results Conclusions


Objectives Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?

  • To investigate to what extent migration & remittances improve asset accumulation in the source communities

  • To examine whether migration & remittances has impact on structural poverty transitions of rural households

  • To identify channels though which migration & remittances can potentially influence welfare dynamics of rural households

Background Objectives Conceptual framework Data Econometric approach Results Conclusions


Conceptual framework Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?

  • Income is the product of households’ asset endowments & the returns to capital (Barrett,2005)

Background Objectives Conceptual framework Data Econometric approach Results Conclusions


Conceptual framework Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?

Background Objectives Conceptual framework Data Econometric approach Results Conclusions


Conceptual framework Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?

  • Hypotheses

Background Objectives Conceptual framework Data Econometric approach Results Conclusions


Data description Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?

  • Panel survey to assess vulnerability to poverty in Asia

  • 3 provinces in Vietnam (220 villages & 2200 households )

  • 3 provinces in Thailand (220 villages & 2200 households )

  • 2007, 2008 & 2010 of household & village level surveys.

  • Across all three rounds, 2108 & 2095 households appear in all rounds in Vietnam & Thailand,

Background Objectives Conceptual framework Data Econometric Approach Results Conclusions


The Econometric Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?approach

1. Constructing asset index

2. Asset growth equation

Background Objectives Conceptual framework Data Econometric approach Results Conclusions


The Econometric Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?approach

2. Asset growth equation

Background Objectives Conceptual framework Data Econometric approach Results Conclusions


The Econometric Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?approach

Background Objectives Conceptual framework Data Econometric approach Results Conclusions


Results Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?& discussions

Migrant households, income from remittance & number of migrants

Background Objectives Conceptual framework Data Econometric Approach Results Conclusions


Results Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?& discussions

Descriptive statistics of households by migration status in Vietnam &Thailand

Background Objectives Conceptual framework Data Econometric Approach Results Conclusions


Results Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?& discussions

Background Objectives Conceptual framework Data Econometric Approach Results Conclusions

Background Objectives Conceptual framework Data Econometric Approach Results Conclusions


Results Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?& discussions

The Impact of Remittances on Asset Growth by Welfare Status in Vietnam

Background Objectives Conceptual framework Data Econometric Approach Results Conclusions


Results Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?& discussions

The Impact of Remittances on Asset Growth by Welfare Status in Thailand

Background Objectives Conceptual framework Data Econometric Approach Results Conclusions


Results Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?& discussions

Blinder–Oaxaca decomposition of growth difference by remittance status (%)

Background Objectives Conceptual framework Data Econometric Approach Results Conclusions


Results Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?& discussions

  • For Vietnam

  • Remittances (not migration) has significant impact in explaining asset accumulation overtime

  • Structural poor migrant households with remittances experience higher growth in asset

  • Remittances increase rural wellbeing by increasing productivity and endowment effect to some extent

  • Shocks, limited accessibility of infrastructure facilities & ethnicity hinder asset accumulation overtime

  • Background Objectives Conceptual framework Data Econometric Approach Results Conclusions


    Results Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?& discussions

    • For Thailand

  • Migration & remittances hinder rural households to accumulate assets & escape from poverty

  • Migration & remittances decrease asset accumulation for structural poor households,

    • It offsets the tendency of poor households to climb out of poverty & catch-up to their better-off neighbors.

  • Shocks, limited accessibility of infrastructure facilities & gender offset the tendency toward convergence

  • Background Objectives Conceptual framework Data Econometric Approach Conclusions


    Conclusions Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?

    • Poor households are more likely to migrate & receive remittances, but tend to have low quality and return employment

    • Rapid & continuing out-migration of younger household members increase labor constraints

    • Households receiving remittances tend to be structurally poor households because they spend remittances for consumption purpose

    Background Objectives Conceptual framework Data Econometric Approach Conclusions


    Conclusions Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?

    • Policy recommendations

    • Migration & remittances increase productivity.

    • However, not all migration decisions lead to the expected success

    • High rates out-migration of young households members can result in

      • a decline in production & productivity in rural areas,

      • bad employment in urban areas

    • Inequality in rural areas may continue growing

    Background Objectives Conceptual framework Data Econometric Approach Conclusions


    Thank you for your attention Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?


    Description & Summary Statistics of Panel Variables ( Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?N = 6318)


    Description & Summary Statistics of Panel Variables ( Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?N = 6318)


    Description & Summary Statistics of Panel Variables ( Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?N = 6318)


    Results Southeast Asia: Do they Offer Paths for Structural Poverty Transitions?& discussions

    Structural income & poverty by migration status

    Background Objectives Conceptual framework Data Econometric Approach Results Conclusions


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