Do international remittances promote poverty alleviation? Evidence from low- and middle-income countries

Figures & Tables

Model	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)

	OLS	OLS	OLS	FE	FE	FE	IV + FE	IV + FE	IV + FE
DV	P_0−1.9	P_1−1.9	P_1−3.2	P_0−1.9	P_1−1.9	P_1−3.2	P_0−1.9	P_1−1.9	P_1−3.2
R	−0.950^*** (0.052)	−0.362^*** (0.020)	−0.673^*** (0.039)	−0.575^*** (0.156)	−0.139^*** (0.037)	−0.430^*** (0.118)	−1.012^*** (0.196)	−0.475^*** (0.100)	−0.665^*** (0.144)
log_IC	−19.677^*** (0.773)	−7.485^*** (0.406)	−14.974^*** (0.507)	−12.789^*** (1.334)	−3.558^*** (0.559)	−10.919^*** (0.950)	−11.245^*** (1.578)	−2.372^** (0.896)	−10.090^*** (1.031)
GN	0.297^*** (0.049)	0.177^*** (0.033)	0.213^*** (0.030)	0.503^*** (0.084)	0.355^*** (0.056)	0.407^*** (0.067)	0.497^*** (0.111)	0.350^*** (0.080)	0.404^*** (0.084)
INF	0.009 (0.027)	0.029^** (0.012)	0.009 (0.023)	0.012 (0.026)	−0.004 (0.015)	0.008 (0.022)	0.052 (0.032)	0.026 (0.019)	0.029 (0.024)
Observations	345	345	345	345	345	345	336	336	336
Adjusted R²	0.814	0.729	0.835	0.535	0.400	0.609	0.362	0.056	0.490
Hausman (γ)				6.43 (0.000) ^***	15.32 (0.000) ^***	6.70 (0.000) ^***
F-test of excluded instruments							30.850 (0.000) ^***	30.850 (0.000) ^***	30.850 (0.000) ^***
Kleibergen–Paap LM Test							11.820 (0.003) ^***	11.820 (0.003) ^***	11.820 (0.003) ^***
Hansen J test							2.176 (0.140)	0.075 (0.785)	1.625 (0.202)
Endogeneity test							4.347 (0.037)^**	9.311 (0.002) ^***	2.779 (0.096) ^*

Model	(7)	(8)	(9)

	IV + FE	IV + FE	IV + FE

DV	P_0−1.9	P_1−1.9	P_1−3.2
R	−1.005^*** (0.206)	−0.471^*** (0.104)	−0.661^*** (0.153)
log_IC	−10.864^*** (1.543)	−2.244^** (0.908)	−9.844^*** (1.012)
GN	0.499^*** (0.116)	0.350^*** (0.082)	0.405^*** (0.087)
INF	0.040 (0.033)	0.022 (0.020)	0.022 (0.025)
POL	−1.489^** (0.589)	−0.490 (0.351)	−0.954^** (0.359)
Observations	333	333	333
Adjusted R²	0.377	0.064	0.500
F-test of excluded instruments	29.79 (0.000) ^***	29.79 (0.000) ^***	29.79 (0.000) ^***
Kleibergen–Paap LM test	11.330 (0.004) ^***	11.330 (0.004) ^***	11.330 (0.004) ^***
Hansen J test	0.757 (0.384)	0.004 (0.949)	0.689 (0.406)
Endogeneity test	5.735 (0.017) ^**	9.351 (0.002) ^***	3.361 (0.067) ^*

Models	(1)	(2)	(3)	(4)	(5)	(6)

	One-step SGMM	One-step SGMM	One-step SGMM	One-step SGMM	One-step SGMM	One-step SGMM

DV	P_0−1.9	P_1−1.9	P_1−3.2	P_1−1.9	P_1−1.9	P_1−3.2
L1.P_0−1.9	0.699^*** (0.161)			0.697^*** (0.171)
L1.P_1−1.9		0.567^*** (0.100)			0.589^*** (0.112)
L1.P_1−3.2			0.707^*** (0.150)			0.707^*** (0.164)
R	−0.374^* (0.191)	−0.064 (0.066)	−0.308^* (0.150)	−0.386^** (0.180)	−0.080 (0.057)	−0.324^** (0.147)
L1.R	−0.123 (0.129)	−0.015 (0.041)	−0.064 (0.099)	−0.124 (0.130)	−0.018 (0.043)	−0.062 (0.102)
log_IC	−4.068^* (2.025)	−1.122^** (0.537)	−4.028^* (2.084)	−4.196^** (1.772)	−1.245^** (0.551)	−4.250^** (1.972)
GN	0.049 (0.051)	0.046^** (0.022)	0.027 (0.043)	0.048 (0.057)	0.042^** (0.020)	0.026 (0.048)
INF	0.014 (0.023)	0.005 (0.005)	0.004 (0.024)	0.015 (0.025)	0.007 (0.006)	0.005 (0.026)
POL				−0.076 (0.606)	−0.046 (0.179)	0.015 (0.596)
AR (2)	0.61 (0.545)	0.60 (0.546)	0.27 (0.789)	0.64 (0.523)	0.60 (0.546)	0.31 (0.757)
Hansen J test	4.91 (0.672)	4.09 (0.770)	5.02 (0.658)	3.15 (0.871)	2.32 (0.940)	3.99 (0.781)
Difference-in-Hansen test	1.36 (0.851)	4.27 (0.370)	1.79 (0.775)	2.99 (0.560)	4.98 (0.290)	4.28 (0.370)
Instruments	27	27	27	28	28	28
Observations	209	209	209	209	209	209

Models	(1)	(2)	(3)	(4)

DV			R
Excluded instruments
TOP	0.102^*** (0.018)	0.107^*** (0.018)	0.107^*** (0.018)	0.100^*** (0.016)
log_EX	0.126 (0.483)	0.245 (0.497)	0.226 (0.470)	0.893 (0.214)
Included exogenous variables
log_IC	4.182^** (1.985)	4.021^** (1.979)	4.173^** (1.752)
GN	−0.021 (0.049)	−0.022 (0.049)
INF	0.025 (0.027)
Observations	336	336	336	336

Countries	Years	Countries	Years	Countries	Years
Albania	2008, 2012	Gambia	2010, 2015	Nepal	2003, 2010
Armenia	2002–2016	Georgia	2003–2016	Nicaragua	2005, 2009, 2014
Azerbaijan	2005	Ghana	2012, 2016	Niger	2005, 2007, 2011, 2014
Bangladesh	2005, 2010, 2016	Guatemala	2006, 2014	Nigeria	2003, 2009
Belarus	2002–2016	Honduras	2010–2016	Pakistan	2004–2005, 2007, 2010–2011, 2013, 2015
Benin	2003, 2011, 2015	India	2004, 2009, 2011	Peru	2008–2015
Bhutan	2012	Indonesia	2002–2014	Philippines	2003, 2006, 2009, 2012
Bolivia	2002, 2004–2009, 2011 2016	Iran	2005, 2006, 2009, 2013–2016	Russian Federation	2010–2015
Bosnia and Herzegovina	2007, 2011	Iraq	2012	Rwanda	2005, 2010, 2013, 2016
Botswana	2009, 2015	Jamaica	2002, 2004	Senegal	2005, 2011
Brazil	2012–2016	Jordan	2002, 2006, 2008, 2010	Serbia	2012–2015
Bulgaria	2006–2014	Kazakhstan	2009–2016	Sri Lanka	2002, 2006, 2009, 2012, 2016
Burkina Faso	2003, 2009, 2014	Kenya	2005, 2015	St. Lucia	2016
Burundi	2013	Kyrgyz Re-public	2002–2016	Tajikistan	2009, 2015
Congo, Dem. Rep	2012	Malawi	2004, 2010, 2016	Tanzania	2007, 2011
Costa Rica	2002–2016	Malaysia	2004, 2007–2008, 2011, 2013, 2015	Togo	2006, 2011
Cote d’Ivoire	2002, 2008, 2015	Maldives	2009	Tunisia	2005, 2010, 2015
Dominican Republic	2002–2016	Mali	2006	Turkey	2005–2016
Ecuador	2008–2014	Mexico	2004–2005, 2006, 2008, 2010, 2012, 2014, 2016	Uganda	2002, 2005, 2009, 2012, 2016
El Salvador	2002–2016	Moldova	2002–2015	Ukraine	2002–2008, 2011–2015
Ethiopia	2015	Morocco	2006, 2013	Zambia	2006, 2010, 2015
Gabon	2005	Namibia	2009, 2015

Variables	Definitions	Source	Expected Sign	Mean	Std. Dev.
Dependent variables
P_0−1.9	The percentage of the population that is living under 1.90 USD per day (constant 2011 USD adjusted for PPP)	WDI		11.80	17.45
P_1−1.9	The percentage of mean shortfall in income from 1.90 USD per day (constant 2011 USD adjusted for PPP)	WDI		4.06	7.18
P_1−3.2	The percentage of mean shortfall in income from 3.20 USD per day (constant 2011 USD adjusted for PPP)	WDI		10.15	13.01
Explanatory variables
R	Total remittance consisting of personal transfers and compensation of employees as a share of GDP (current USD)	IMF	Negative (−)	7.22	7.97
Control variables
IC	Income (GDP) per capita (constant 2011 USD adjusted for PPP)	WDI	Negative (−)	9,029.94	6,055.61
GN	Gini Index varies between 0 (equality) and 1 (inequality)	WDI	Positive (+)	39.32	8.27
INF	Percentage change of consumer price index in annual average	WDI	Positive (+)/Negative (−)	7.23	7.27
Instrumental variables
TOP	Total import and export as a share of GDP	WDI	Positive (+)	77.79	31.39
EX	LCU per USD	WDI	Positive (+)	896.54	3,430.19