Remittances and natural disasters : ex-post response and contribution to ex-ante preparedness Mohapatra, Sanket; Joseph, George; Ratha, Dilip

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Mohapatra, Sanket ; Joseph, George ; Ratha, Dilip
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Environment, Development and Sustainability
Housing -- Analysis; Natural disasters -- Analysis; Livestock -- Analysis
Byline: Sanket Mohapatra (1), George Joseph (1), Dilip Ratha (1) Keywords: Natural disasters; Migration; Remittances; Poverty; Coping strategies; Insurance; Development finance Abstract: Macro- and microeconomic evidence suggests a positive role of remittances in preparing households against natural disasters and in coping with the loss afterward. Analysis of cross-country macroeconomic data shows that remittances increase in the aftermath of natural disasters in countries that have a larger number of migrants abroad. Analysis of household survey data in Bangladesh shows that per capita consumption was higher in remittance-receiving households than in others after the 1998 flood. Ethiopian households that receive international remittances seem to rely more on cash reserves and less on selling household assets or livestock to cope with drought. In Burkina Faso and Ghana, international remittance-receiving households, especially those receiving remittances from high-income developed countries, tend to have housing built of concrete rather than mud and greater access to communication equipment, suggesting that they are better prepared against natural disasters. Author Affiliation: (1) World Bank, 1818 H Street, NW, Washington, DC, 20433, USA Article History: Registration Date: 14/10/2011 Received Date: 06/08/2010 Accepted Date: 14/10/2011 Online Date: 06/04/2012 Article note: This paper--a joint product of the Global Facility for Disaster Reduction and Recovery (GFDRR) Unit, Sustainable Development Network Vice Presidency, and the Migration and Remittances Team of the Development Prospects Group, Development Economics Vice Presidency--is part of a larger effort of the GFDRR unit to disseminate the findings a World Bank-UN Assessment of the Economics of Disaster Risk Reduction titled "Natural Hazards, UnNatural Disasters". Thanks to Antonio C. David for his contribution to the macroeconomic analysis in the first part of the paper. Readers should send their comments on this article to within 3 months of publication of this issue.
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