Using a rigorous, evidence-focused review method, this literature review found 11 relevant studies that directly compare the impacts of cash transfers and remittances on a range indicators of poverty at the household level. The evidence base is small and highly context-specific. External and internal validity of most studies are limited, so the conclusions that can be drawn from this review are tentative. In the majority of studies both cash transfers and remittances are shown to have positive impacts on reducing poverty. Overall, remittances seem to have stronger poverty reducing impacts. There are a number of factors that seem to explain why remittances have a greater effect. In the studies reviewed here, remittances appear to reach both a greater share of the overall population, than cash transfers, and more poor households. Furthermore, remittances were higher in value in the majority of studies reviewed. Finally, two studies show that remittances are put towards different uses. Further high-quality research is needed on all factors.
Jessica Hagen-Zanker and Carmen Leon Himmelstine