The Impact of Remittances on Saving Behaviour and Expenditure Patterns in Vietnam

Thanh Xuan Hua, Roselinde Kessels and Guido Erreygers
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Thanh Xuan Hua: Department of Economics, College of Economics, Can Tho University, Can Tho City 94000, Vietnam
Roselinde Kessels: Department of Data Analytics and Digitalization, Maastricht University, P.O. Box 616, 6200 MD Maastricht, The Netherlands

Economies, 2022, vol. 10, issue 9, 1-19

Abstract: We examine the effects of receiving remittances on household saving behaviour and expenditure patterns in Vietnam. We consider the amount of saving, the saving rate, and the share of expenditure, as well as per capita expenditure on education, health, assets, house repairs, food, non-food, and utilities. We apply propensity score matching to data from the Vietnam Household Living Standard Survey (VHLSS) of 2012. We find that remittances have a positive impact on household savings and increase both the amount of saving and the saving rate. As far as expenditure patterns are concerned, our results indicate that receiving households spend more on health, assets, and house repairs, and less on food. This finding suggests that households tend to use remittances productively, with receiving households increasing their investments in human and physical capital. For the economy as a whole, remittances can create more opportunities for the development of services provided by banks, financial institutions, hospitals and healthcare centres, and give incentives to the production of building materials and tangible assets.

Keywords: remittances; household saving behaviour; household expenditure patterns; propensity score matching; Vietnam (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2022
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