International Remittances and Private Inter-household Transfers Exploring the Links

We investigate the effect of remittances from migrated family members on informal inter-household transfers, an issue that has received limited attention in the literature. Using rich panel data from urban Ethiopia, we show that receiving international remittances increases the value of private domestic inter-household transfers, whereas receiving domestic remittances does not have any e ect. We also show that the transfers sent respond to shocks to a great extent. Our results provide new evidence on the trickle-down effects of international remittances, effects important to consider when analyzing the impact of international remittances on household outcomes in recipient countries.