Assessing the direct and spillover effects of shocks to refugee remittances

We examine the impact of exogenously shutting down remittances to Kakuma refugee camp in northern Kenya during 2015. We find that the remittance shutdown did not reduce refugee consumption on average. However, it did decrease consumption of households that previously received remittances through the networks that were closed, while simultaneously increasing consumption for those who continued to receive remittances through other mechanisms. The shutdown also resulted in decreases in the probability of consuming a variety of goods by the host population, particularly those with livelihoods linked to the refugee camp. These findings underscore the tight links between refugee camps and surrounding communities, and are a testament to the multiplier effects of remittances.