REMITTANCE AND POVERTY IN SOMALIA: PROPENSITY SCORE MATCHING APPROACH

Year 2021, Volume: 5 Issue: 1, 50 - 68, 25.03.2021

Mustafe Abdi Mohamed

Abstract

Somalia, the remittance from the diaspora, is an essential part of the economy, where the inflows indicate more than the sum of the foreign aid and investment together. More than two million Somalis living abroad send 1.3 billion dollars annually to Somalia. The study was set up to examine how remittances affect household expenditure and reduce poverty in Somalia. Specifically, this study aims to investigate how households spend remittances in Somalia using the latest survey data from the Somali High- Frequency Survey 2018, and the equation is estimated using propensity score matching. This study’s calculated result showed that the per capita consumption of remittance recipients was higher than nonrecipient households, and household poverty levels decreased significantly due to remittance.

Keywords

Somalia, Households, Consumption, Poverty, Propensity Score Matching

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