Remittances in response to environmental shocks: a panel study of rural Thailand and Vietnam

Migration has increasingly been highlighted as a potential adaptation employed by individuals or households to cope with environmental disruptions. Despite well-established insight on environment-induced migration, the interplay between environment and financial remittances, an integral part of migration in many contexts, remains underexplored. Employing panel data from Thailand and Vietnam from 2007 to 2017, linked to precipitation data, we investigate the effect of rainfall variability and perceived environmental shocks on household remittance reception. Our regression analyses reveal that severe drought-like conditions in the current year increase the likelihood of households receiving remittances in Thailand. In Vietnam, however, both moderately drier and wetter conditions positively influence remittance inflows, indicating a broader sensitivity of remittance flows to environmental variability. Lagged effects of precipitation deviations are evident, particularly in Vietnam, where similar patterns persist over time. Yet, unlike the effects of observed precipitation deviations, perceived environmental shocks reported by households show limited association with migration and remittance flows. Our findings contribute to the understanding of the relationship between environmental variability, particularly precipitation deviations, and household migration and remittance over time.