Determinants and Impacts of International Remittances on Household Welfare in Vietnam

Remittances can potentially help to promote economic development by providing a mechanism to share risks, reduce poverty, and improve equality. However, the overall impacts of remittances are uncertain from the view of economic theory as different mechanisms lead to opposite impacts. Since the 1990s, Vietnam has experienced a dramatic growth in remittance flows from abroad. Vietnam is a unique case for study, as economic motives historically played a smaller role in outward migration. Fortunately, household survey data is available for this time period, allowing for a detailed analysis of the impacts of international remittances on Vietnam. Specifically, we examine the characteristics of recipients and the impacts of international remittances on economic inequality and poverty. We conclude that international remittances are helping to improve equality. As such, new development policies must also account for potential impacts on remittance flows.