Remittances to Latin America from migrants in the United States: Assessing the impact of amnesty programs

The magnitude of remittance flows to Latin America exceeds the combined inflows of foreign direct investment and official development assistance to the region. Since the United States is the destination country of the vast majority of migrants from Mexico, as well as from other Latin American countries, U.S. immigration policy can have a significant impact on the volume of remittances to the Latin American region. This paper studies how a generalized amnesty — a provision in the 1986 Immigration Reform and Control Act (IRCA) — affected immigrants' remitting patterns. In models that control for immigrants' length of residence in the United States and for economic conditions in both the U.S. state of residence and the country of origin, we estimate substantial post-legalization drops in remittances sent home by Mexican-born migrants who legalized through IRCA. Given the potential positive impact of remittances on investment levels, entrepreneurship rates and the development of the financial sector, this finding underscores the importance of gaining a better understanding of the impact that immigration policies in immigrant-receiving countries may have on the stream of remittance flows to immigrant-sending communities in developing regions.     

Understanding the Remittance Gender Gap among Hispanics in the US: Gendered Norms and the Role of Expectations

Using the 2006 Latino National Survey (LNS), this study analyzes the existence of a gender gap in favor of men in the monetary remittance behavior of Hispanics residing in the United States. Findings indicate that cultural gender norms and expectations in the country of origin play a key role. The study shows that women migrants are less likely to remit than men and, when they do, they transfer smaller amounts. The remittance gender gap is not universal among subgroups, since it is only observable among Hispanics who came to the US to improve their economic situation, plan to return to their home country, and have low income and low schooling. An index on migrants’ perceptions of gender roles as a proxy for cultural gendered norms is constructed and shows that more traditional gender views are associated with a significant gender gap in favor of men in remittances.     

Remittances and return migration

This paper utilizes survey data of return migrants to analyze the determinants of remittances sent while the migrants were abroad. We approach our research question from the perspective of three sending countries in the Maghreb, namely Algeria, Morocco, and Tunisia. We investigate the remittance behavior using the migrants’ conditions before migration as well as during the migration experience. Using a two‐part model, we show that the decision to remit and the amount remitted depend on a combination of different migrant characteristics and reasons for migration as well as the form of migration. More importantly, we also consider if the remittance behavior is dependent on the type of return: “decided” or “compelled.” We show that the two groups have different incentives to remit, which can help explain the link between type of migrants and their remittance behavior.     

Remittances and temporary migration

In this paper we study the remittance behavior of immigrants and how it relates to temporary versus permanent migration plans. We use a unique data source that provides unusual detail on remittances and return plans, and follows the same household over time. Our data allows us also to distinguish between different purposes of remittances. We analyze the association between individual and household characteristics and the geographic location of the family as well as return plans, and remittances. The panel nature of our data allows us to condition on household fixed effects. To address measurement error and reverse causality, we use an instrumental variable estimator. Our results show that changes in return plans are related to large changes in remittance flows.     

Migrants’ international transfers and educational expenditure

The primary objective of this article is to cast some light upon the relationship between education expenditure and the volume of remittances sent to Albania from abroad by international migrants. To assess the existence of an education enhancing effect of remittances, an Engel curve framework is used. In addition, quintile regression analysis is employed to investigate whether migrants’ remittances have a differentiated effect on various quantiles of the conditional distribution of education consumption. The two main empirical findings are that household income has a positive and well‐determined impact on education expenditure, whereas international transfers do not influence education spending.     

Macroeconomic effects of international remittances: The case of developing economies

Over the past few decades international workers' remittances have significantly contributed to the foreign exchange reserves of the developing countries. While these household level remittance flows have often been associated with poverty alleviation, positive welfare gains and even as an alternate source of development finance, a detailed study of the effects of these flows on a remittance-dependent small developing economy, however shows counterintuitive results. The paper applies the Dutch Disease theory to explain the effects of remittances on the economy and introduces a micro–macro framework to establish channels of transmission of remittances through the economy. The paper shows that international remittances, by altering the household budget constraint, have a direct impact on the micro level household decision making, primarily with respect to the consumption and labor supply decisions. These when aggregated give rise to significant adjustments in the macro level production functions and consumption behaviors, leading to a decline in the output, particularly of the trading sector and an adverse impact on the external sector of the economy.     

Equilibrium migration with invested remittances: The EECA evidence

This paper analyzes international migration when migrants invest part of their income in their country of origin. We show that a non-total migratory equilibrium exists. Exogenous shocks, such as an increase in migrant income, lead to an increase in optimal invested remittances per migrant, and a higher wage in the country of origin. Yet the net effect on the equilibrium number of migrants is positive. Hence, in equilibrium, emigrants' optimal invested remittances and number of migrants are positively related. We use data from twenty five countries in Eastern Europe and Central Asia in 2000 to test for this implication of our model. OLS and bootstrap estimates reveal a positive elasticity of the number of migrants with respect to estimated invested remittances per migrant in the range of [0.3; 0.7].     

Remittances and incumbency: Theory and evidence

By raising household income, remittances lower the marginal utility of targeted electoral transfers, thus weakening the efficacy of vote buying. Yet, remittances make individuals wealthier and believe the national economy is performing well, which is positively attributed to the incumbent. Building on these insights, I show that the confluence of these divergent channels generate a surprising result that at increasingly higher levels of dissatisfaction with the incumbent, a remittance recipient is more likely to vote for the incumbent than a non‐remittance recipient. These predictions and their underlying mechanisms are substantiated across 18 Latin American countries.     

Bilateral real exchange rates and migration

Migrants who move across borders are, to a large extent, motivated by the prospect of earning higher incomes at destination, which can be partly transferred back to their countries of origin via remittances. This suggests that the real exchange rate can influence the incentives to migrate, as it determines the purchasing power of expected income in terms of the currency of the origin country. This article investigates empirically how bilateral real exchange rate fluctuations influence international migration flows. To do so, we build a dataset of 30 OECD destination countries and 165 origin countries over the period 1980–2011 and estimate an equation derived from a micro-founded random utility maximization model that allows for unobserved heterogeneity between migrants and non-migrants. Our results show that migration flows are highly responsive to bilateral real exchange rates: A 10% real appreciation of the currency of the destination country is associated with an 18.2–19.4% increase in migration flows.     

Can remittances buy peace?

This paper offers new empirical evidence on the effects of remittance flows on conflict incidence, onset, and duration in recipient countries. It improves on previous studies by controlling for unobserved heterogeneity among remittance recipient countries, serial correlation of conflict, and the possibility of conflict being endogenous to remittances. To motivate the empirical findings, a micro‐founded model of conflict is developed. The model shows that wealth transfers (such as remittances) can raise the opportunity cost of participation in conflicts which can lead to a reduction in both the number of rebels and the force used by the government forces.     

Income transfers of Chinese rural migrants: some empirical evidence from Jinan

This paper explores the determinants of migrant remittances to rural households using data on male migrant workers drawn from the Jinan Municipality in Shandong province in the summer of 1995. The majority of migrants are found to retain close links with their rural households with 85%?remitting some income in the 12 months preceding the survey date. The transfers accounted for over a third of urban labour earnings. A number of models are used to undertake the estimation of remittance functions. No evidence of altruistic behaviour is uncovered and evidence for exchange and coinsurance theories is mixed. Labour earnings proved the most robust determinant of the level of remittance and the remittance/wage elasticity calculated is found to be at the top end of the range of estimates obtained in the literature.     

Remittances,transaction costs,and informality

Recorded workers' remittances to developing countries reached $167 billion in 2005, bringing increasing attention to these flows as a potential tool for development. In this paper, we explore the determinants of remittances and their associated transaction costs. We find that recorded remittances depend positively on the stock of migrants and negatively on transfer costs and exchange rate restrictions. In turn, transfer costs are lower when financial systems are more developed and exchange rates less volatile. The negative impact of transactions costs on remittances suggests that migrants either refrain from sending money home or else remit through informal channels when costs are high. We provide evidence from household surveys supportive of a sizeable informal sector.     

The probability,size and uses of remittances from urban to rural areas in India

This paper examines the important determinants of the decision to remit and of the amount remitted by migrants in Delhi to their place of origin. The findings are compared with those obtained for Kenya by Knowles and Anker. The comparative exercise helps us to identify universal patterns of remittance behaviour from those which are time, place and sample specific. The paper also throws light on the validity of infering technological change in agriculture in rural areas from data on uses of remittances.     

Remittances and Household Expenditures on Education in Ghana's Northern Region: Why Gender Matters

Studies of the impact of migrant remittances on receiving households assume that these households act as a unit in receiving remittances and making decisions about their use. Thus, many of these studies use the gender of the household head as a key control variable. This study questions this assumption, using original qualitative and quantitative data on rural–urban migration of women in Ghana to show that gendered social norms of household provisioning influence the intrahousehold flow of remittances. Regression results indicate that migrant women are more likely to send remittances to other women, creating female-centered networks of remittance flows even within male-headed households. The implications of this for intrahousehold resource allocation are explored through an analysis of the impact of the gender of the remitter and recipient on education expenditure. The results show that regardless of the gender of the household head, households in which women are the primary recipient of remittances spend more than twice as much on education as households in which men are the primary recipient.     

Remittances and Business Cycles: Comparison of South Asian Countries

ABSTRACT

South Asia is one of the world's principal remittance-receiving regions. This study examines the home and host business cycles of migrant remittance flows to the region. Employing the Structural Vector Autoregression (SVAR) technique, the remittance behaviour of the region's four main countries is compared. Remittances to India and Pakistan show a mainly acyclical behaviour with respect to the output of the four host regions, and a countercyclical behaviour with respect to home output. In contrast, remittances to the two smaller economies of Bangladesh and Sri Lanka are found to be mainly procyclical. The study shows that the macroeconomic remittance behaviour varies with respect to the importance of remittance flows in the home economy. Moreover, remittance behaviour seems to respond more to home economy specificities than to those of the different regions that host the migrants from the developing countries.     

Destined to Receive: The Impact of Remittances on Household Decisions in Armenia

The paper uses data from Armenia to test the implications of remittance flows on behavior of receiving households. We find that remittance‐receiving households work fewer hours and spend less on the education of their children. While saving more, these households are not leveraging their savings to borrow from the banking system to expand their business activities. This evidence suggests that the benefits of remittances might be overstated and emphasizes the importance of measuring their impact in a general‐ rather than a partial‐equilibrium context.     

Impact of remittances on household health care expenditure: Evidence from the Nepal Living Standards Survey

This paper examines the effect of remittance inflows on health care expenditure in Nepal using the Nepal Living Standards Survey 2010–2011. Using the recursive three‐stage least square regression method, the propensity score matching method, and the Oaxaca–Blinder decomposition method, we find a positive and significant effect of remittances on health care expenditure. In particular, our analysis shows a 0.099% increase in health care expenditure for every 1% increase in overall remittances. This effect increases to 0.189% for earned remittances (remittances received from a household member). We also find that remittance‐receiving households with at least one migrant family member have different health care spending behavior than those with no migrant members.     

Remittances of Immigrants in Greece

The present paper is a case study of the remittance behavior of immigrants in Greece. In addition to some of the usual factors affecting remittance behavior, it examines five factors than have received little attention in the literature: relative deprivation, existence of property in the country of origin, expectation on inheritance, stability of employment, and more than one migrant in the family. We use Heckman's selection model with survey data from 607 immigrants. Significant factors for the decision to remit are the existence of children living with the migrant, stability of employment, and gender. The basic factors affecting the size of remittances are the level of income, the existence of children living with the migrant, and the length of time in Greece.     

The impact of foreign and domestic remittance types and senders on education outcomes

Migration and remittances are very important for Nepal, yet the country continues to be plagued by low financial development. Increases in human capital investments, such as enrollment of school‐aged children, are a possible gain from the country's labor movements, which can be leveraged further through an understanding of the microeconomic processes involved. This study examines how remittances from both household and nonhousehold members affect school enrollment rates for children in Nepalese families. We analyze the positive and negative impacts of migration and remittances separately and consider both the type and location of the remittance sender using the Nepal Living Standards Survey (NLSS‐III) of 9,335 school‐aged children. We find enrollment more associated with an exogenous process and use this to estimate marginal effects in which remittances significantly increase children's school enrollment by about 2% points in most cases. These results suggest policymakers should encourage domestic migration (which allows proximity between senders and recipients of remittances as well as less family disruption).