The effects of remittances on poverty and inequality: Evidence from rural southern Morocco

In this paper, we examine the effect of migrants’ remittances on poverty and inequality. The survey data were collected in Morocco, in the rural areas of the region Souss-Massa-Draa. By applying an original approach, we estimate the counterfactual income of remittance-recipient households corresponding to a hypothetical value of its average income calculated for a scenario without remittances; this is then compared with its current income. We find that the poverty rate and the vulnerability of non-poor households are significantly dropped due to remittances. Our findings also suggest that remittance inflows have increased income inequality compared to the no-migration counterfactual situation.