This study combines insights of the New Economics of Labour Migration with the asset-basedapproach to welfare dynamics using panel household data from Vietnam. This method allows us to determinewhether poverty transitions induced by remittances are actually structural, that is, based on asset growth andtherefore long term, or stochastic, that is, based only on short-term increases in income, which implies a risk offalling back into poverty. To control for endogeneity of remittances, we use household fixed effects and instru-mental variables estimation. The paper shows that remittances have a positive impact on asset growth and thatthe impact differs with welfare status and ethnicity.
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