Does Migration Help Reducing Inequality and Social Exclusion?

The impact of remittance flows on growth and income distribution has attracted a great deal of attention, but the theoretical and empirical literature on the relationship between remittances and economic development is far from clear. Although there is wide consensus that foreign remittances can help receiving households to increase income, consumption and capabilities to face socioeconomic shocks, there has been little quantitative research on impacts of remittances on household welfare and poverty. Our paper seeks to fill some of these gaps and it proposes an empirical analysis of the role of remittances as tool for reducing inequality and covering households against poverty and social exclusion risks. The empirical analysis focuses on four Eastern European Countries: Slovenia, Poland, the Czech Republic and Hungary, and is based on the EU-SILC 2005 data-set, that for each household provides information regarding interhousehold cash transfers received amongst which, regular cash support from households in other countries (i.e. remittances) are included.