Does the Impact of Remittances on Poverty and Human Development Depend on the Climate of Receiving Areas?

This chapter uses matching techniques and a recent nationally representative household survey for Yemen combined with weather data to measure the impact of remittances, both domestic and international, on poverty and human development outcomes (school enrolment, immunization, and malnutrition). The estimations are carried both nationally and in areas with favorable and unfavorable climate. Remittances are found to have a statistically significant impact on many of the indicators, and this is especially the case for international remittances which tend to provide more resources to their beneficiaries. The impact of remittances on measures of poverty and malnutrition is also found to be stronger in districts that are affected by unfavorable climate (as measured through higher temperatures or lower levels of rainfall), while the impact of remittances on school enrollment is found to be stronger in areas with better climate. The results are consistent with households in the least favorable areas using their remittances to meet basic needs first, while households in better areas can use remittances flows for education investments.