Impact of Remittances and International Migration on Poverty in Central Asia: The cases of the Kyrgyz Republic, Tajikistan, and Uzbekistan

Several studies have hitherto examined the impact of remittances and international migration on poverty in the developing world. However, the Central Asian region remains under-researched, with no country comparison study examining the impact of remittances on poverty in the region. This paper fills this research gap by analyzing a new dataset on remittances, international migration, and poverty from the Kyrgyz Republic, Tajikistan, and Uzbekistan. The results show that both international migration and remittances significantly reduce poverty in these Central Asian countries. The main issue with the standard empirical approach is potential endogeneity of migration and remittances in the model of poverty, as income has been suggested to be a significant factor in migration decisions. In practice, instrumental variables are rarely a convincing and as well as efficient solution. Therefore, we estimate the total effect of migration and remittances instead of that at the margin. Results show differences between current actual poverty rates and those under a simulated no-migration scenario. Copyright (c) 2018 JAEBR