Remittances for the Republic of Moldova

This book is a research study of the impact of remittances on spending patterns of households from the Republic of Moldova using a demand-modeling approach. Like other related studies the findings show that the differences in marginal spending patterns of spending between remittance-receiving and non-receiving households are fairly small. Unlike other studies this book analyses the influence of remittances depending on their share in the budget and claims that the size and significance of the differences in spending patterns depend on this criteria. Remittances do not increase the marginal propensity to invest, moreover, the higher is the dependence on the remittances, the lower is on margin the inclination to invest. The extra purchasing power coming from remittances is used for consumer durables and services, significantly contributing to the reduction of poverty in Moldova and boosting demand for local goods and services. Remittances significantly increase the marginal propensity to save which can be viewed as a capacity to invest into income-generating activities.