The objective of this study was to investigate the developmental effects of remittances on poverty, inequality and self-employment in three Balkan countries: Macedonia, Kosovo and Bosnia-Herzegovina, and to put them in the light of three pertinent issues therein: ethnicity, the urban-rural divide and the gender of the household head. To that end, two waves of micro-surveys have been used in each country – one before and another during the ongoing crisis to check if the latter has changed the patterns through which remittances potentially affect the development in those countries. First, results suggest a positive role of remittances for poverty in Macedonia and Kosovo, but not in Bosnia. Second, results for Macedonia and Kosovo suggest that remittances have been slightly increasing inequality before the crisis, while during it, they have been reducing inequality. Opposite findings are obtained for Bosnia-Herzegovina. Third, remittances in Macedonia were found to play a positive role for the decision to establish an own business, but the effect is small, so that it becomes meaningful only for households who receive the highest amounts of remittances. In Kosovo, remittances were overall found not to be relevant for the decision one to self-employ himself. Further contrary to the two cases, remittances in Bosnia-Herzegovina were found to reduce one’s probability to selfemploy. Important policy recommendations emerge from this analysis. Firstly, given the size of the remittances in the three countries and their significance for the consumption of households, authorities should develop an alternative shielding remittance-receiving households will be thrown into destitute poverty; social safety nets may be activated, but this may exercise a significant burden on the state budget. Therefore, governments should be prepared to take an alternative action for such households, including one-off state aid, in-kind contributions and the like. Second, such a scenario, in addition, will make the current account more vulnerable and raise the question of its financing. If foreign investment are not viable, then dwelling on foreign loans or spending the official reserves may jeopardize macroeconomic stability. Hence, policymakers should seek for sources of stable finances, especially the foreign direct investment to meet an unexpected reduction in remittances. Third, authorities may think of framing a government policy for channeling as much as possible of those money into productive investment in small firms and farms. The policy may involve direct subsidies for those who invest remitted money, reduction or elimination of the social security contributions, especially for young people opening up a firm with remitted money, subsidized loans through the state development banks and the like.