Excellence in Research: The impact of cash transfers on remittances

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This research project will assemble a large data set from existing studies and other sources to investigate the relationship between formal cash transfer programs offered by governments and informal remittance programs and how the two interact to improve the livelihoods of recipients. Formal cash transfer programs have grown rapidly in recent years just as informal cash transfers such as remittances (i.e., the money that migrants send to family/friends) continue to increase and also impact these outcomes. It is not clear whether these cash transfer programs replace or complement informal remittances. Despite this, the relationship between formal cash transfers through government programs and informal transfers from remittances has received relatively little attention. Given that both types of transfers are designed to improve the lives of recipients, understanding the relationship between the two will help guide future cash transfer policies. Because of the large scale of budget cut, the bulk of the award is expected to support undergraduate participation in the research rather than to support the PI. The project will collect publicly available micro-level datasets from numerous cash transfer studies and identify those that also contain variables on financial remittances. It will then econometrically assess the relationship between remittance receipts and participation in cash transfer programs by households using the data assembled from multiple studies/programs. The project will identify whether cash transfer programs and remittances are substitutes or complements. The results of this research will significantly contribute to the remittances and cash transfer programs literature. Several female undergraduates from a group underrepresented in economics will support the research by conducting detailed searches for cash transfer studies and associated datasets. Understanding the nature of the relationship between cash transfers and remittances will provide guidance on cash transfer policies as a mechanism to improve living standards of recipients. This award primarily supports the participation of undergraduate students in the research project.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.