Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 604: Remittances after natural disasters: Evidence from the 2004 Indian tsunami
Andreea Mitrut () and François-Charles Wolff ()
Additional contact information
Andreea Mitrut: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O.Box 640, SE 40530 Gothenburg, SWEDEN
François-Charles Wolff: LEMNA, Université de Nantes and INED Paris
Abstract: We examine the impact of the 2004 Indian tsunami on international remittance transfers using aggregate country data and synthetic control methodology. This procedure implies identifying the causal impact of the disaster by comparing the share of remittances to GDP in Indonesia, the country most affected by the shock, with a counterfactual group constructed using synthetic controls of countries that were not affected by the tsunami but that had a very similar pre-shock trend in international remittance flows. Our results indicate a large impact on remittances in Indonesia just after the tsunami, with 1.35 additional points in share of remittances to GDP in 2005 (compared to the synthetic control group). However, the gap in remittances observed between Indonesia and the synthetic control decreased steadily over the succeeding years and amounted to 0.5 percentage points in 2011.
Keywords: natural disasters; remittances; synthetic control; Indonesia
26 pages, August 2014
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