There is a large and growing body of literature on the impact of internal remittances on
poverty. However, most of the empirical work has been done for Latin American and Asian
countries, and very few studies if any have been conducted in South Africa. Thus the aim of
this paper is to examine the relationship between poverty and remittances in South Africa
using the 2008 National Income Dynamics (NIDS) dataset. This paper follows a basic
approach of comparing actual per capita income excluding remittances with per capita
income including remittances. Our analysis of the data shows that poverty rate calculated
from observed income without remittances is significantly higher compared to poverty rate
derived from income with remittances. More specifically, poverty rate in the former scenario
is 67%, while poverty rate in latter scenario is only 47.7%.