Remittances and Risk Diversification in Developing Country Context: Evidence from Sri Lanka

This study examines the risk diversification of remittance receivers in developing countries, with specific focus on Sri Lanka. Study uses survey data on migration and remittances collected from 750 remittance receiving and non-receiving households in Sri Lanka. Descriptive statistics and Propensity Score matching analysis are used to analyze data. Inter and intra group comparisons of income profiles and other descriptive statistics provide evidence for risk diversification of remittance receivers. Remittance receiving households receive income from diversified sources that support them to diversify the risk they face in the local context. In the propensity score matching analysis it was found that remittances uplift the remittance receivers in the income hierarchy.