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How Effective Are Cash Transfers in Reducing Poverty, Compared to Remittances?

Published online by Cambridge University Press:  16 February 2015

Jessica Hagen-Zanker  and
Carmen Leon Himmelstine
Jessica Hagen-Zanker
Affiliation:
Overseas Development Institute, London E-mail: j.hagen-zanker@odi.org.uk
Carmen Leon Himmelstine
Affiliation:
School of Global Studies, University of Sussex E-mail: c.himmelstine@sussex.ac.uk
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Abstract

Using a rigorous, evidence-focused review method, this literature review found eleven relevant studies that directly compare the impacts of cash transfers and remittances on a range indicators of poverty at the household level. The evidence base is small and highly context specific. The external and internal validity of most studies are limited, so the conclusions that can be drawn from this review are tentative. However, in the majority of studies both cash transfers and remittances are shown to have positive impacts on reducing poverty. Overall, remittances seem to have stronger poverty-reducing impacts. There are a number of factors that seem to explain why remittances have a greater effect. In the studies reviewed here, remittances appear to reach both a greater share of the overall population than cash transfers and a greater share of poorer households. Furthermore, remittances were higher in value in the majority of studies reviewed. Further high-quality research is needed.

Keywords

Social protectionmigrationcash transfersremittancespoverty reduction
Type
Articles
Information
Social Policy and Society , Volume 15 , Issue 1 , January 2016 , pp. 29 - 42
Copyright
Copyright © Cambridge University Press 2015 

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