Remittances after natural disasters: Evidence from the 2004 Indian tsunami

Andreea Mitrut and François-Charles Wolff

No 604, Working Papers in Economics from University of Gothenburg, Department of Economics

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 (search for similar items in EconPapers)
JEL-codes: F24 Q54 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2014-08
New Economics Papers: this item is included in nep-dev, nep-env, nep-mig and nep-sea
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Citations: View citations in EconPapers (3)

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