Remittances, Household Welfare, and the COVID-19 Pandemic in Tajikistan

Remittance inflows are now the largest source of external financing to developing countries, but little research has yet firmly established the effect of remittances on household welfare. We investigate the case of Tajikistan, one of the most heavily remittance-dependent countries in the world. We use a panel dataset collected nationwide and employ an instrumental variable estimation to confirm a positive relationship between receiving remittances and household welfare after correcting for endogeneity. Moreover, we find that the effect of remittances on household spending is more pronounced in households whose head is male, older, and/or less educated. Then, we combine our estimated coefficients with the projected decline of remittance inflows as a result of the coronavirus disease (COVID-19) outbreak and show the pandemic's adverse effect on household spending per capita.

The COVID 19 pandemic, daily mobility and household welfare: Evidence from Tajikistan.

The COVID-19 pandemic has posed severe restrictions on daily mobility for people globally. We use a monthly household panel dataset that covers a period both before and after the outbreak began to examine the impact of COVID-19 on daily mobility and household welfare in Tajikistan. The feature of our dataset is that it contains information on daily mobility for those traveling by vehicle along with their travel purposes. We provide several new findings. First, the impact of the pandemic on daily mobility was limited in Tajikistan, in contrast with the evidence from other countries. The pandemic discouraged motorized travel for family-related purposes in all income groups while keeping other vehicle travel intact for reasons such as work and shopping under the country's lenient travel restrictions. Second, the effects of concerns about the pandemic were not uniform across all vehicle travel when different purposes are taken into account. People who were very concerned about the pandemic were more likely to refrain from motorized travel for family-related purposes. Third, refraining from travel for family purposes exacerbated food insecurity, implying that the safety net provided by family members and relatives was hampered by the limited ability to travel during the pandemic.

Resilience against the pandemic: The impact of COVID-19 on migration and household welfare in Tajikistan.

The COVID-19 pandemic is likely to have adverse effects on the economy through damage to migration and remittances. We use a unique monthly household panel dataset that covers the period both before and after the outbreak to examine the impacts of COVID-19 on a variety of household welfare outcomes in Tajikistan, where remittance inflows in recent years have exceeded a quarter of annual GDP. We provide several findings. First, after April 2020, the adverse effects of the pandemic on household welfare were significantly observed and were particularly pronounced in the second quarter of 2020. Second, in contrast to expectation, the pandemic had a sharp but only transitory effect on the stock of migrants working abroad in the spring. Some expected migrants were forced to remain in their home country during the border closures, while some incumbent migrants expecting to return were unable to do so and remained employed in their destination countries. Both departures and returns started to increase again from summer. Employment and remittances of the migrants quickly recovered to levels seen in previous years after a sharp decline in April and May. Third, regression analyses reveal that both migration and remittances have helped to mitigate the adverse economic outcomes at home during the "with-COVID-19" period, suggesting that they served as a form of insurance. Overall, the unfavorable effects of the COVID-19 pandemic were severe and temporary right after the outbreak, but households with migrants were more resilient against the pandemic.

Projection of the Effects of the COVID-19 Pandemic on the Welfare of Remittance-Dependent Households in the Philippines.

The Coronavirus Disease 2019 (COVID-19) is inevitably affecting remittance-dependent countries through economic downturns in the destination countries, and restrictions on travel and sending remittances to their home country. We explore the potential impacts of the COVID-19 pandemic on the welfare of remittance-dependent households using a dataset collected in the Philippines prior to the outbreak. First, we confirm that remittances are associated with welfare of households, particularly for those whose head is male or lower educated. Then, we use the revision of the 2020 GDP projections before and after the COVID-19 crisis to gauge potential impacts on households caused by the pandemic. We find that remittance inflow will decrease by 14-20% and household spending per capita will decline by 1-2% (food expenditure per capita by 2-3%) in one year as a result of the pandemic.