The Effects of Remittances on Poverty at the Household Level in Bolivia: A Propensity Score Matching Approach

In the last few years, Bolivia has experienced a growing migration phenomenon. Many household members migrate from their homes in order to look for better opportunities and to improve their household income. In this paper, we aim to explore the effects of remittances on Bolivian household poverty levels. We use micro data from the 2008 Household Survey, conducted by the National Institute of Statistics (INE). We calculate propensity score matching estimators in order to address the potential bias due to heterogeneous factors in the sample. Then, we estimate the average treatment effect on the treated to compare the poverty level between households which receive and do not receive remittances. Results show that remittances have a positive effect on reducing urban households’ poverty level, whereas there is no effect on rural households’ poverty.