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Why do migrants remit?

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  • Seyedsoroosh Azizi

Abstract

This paper examines primary incentives of remitting. Using estimated bilateral data on remittances, this paper demonstrates that a rise in the home (remittance‐receiving) country's gross national income (GNI) per capita leads to fewer remittances and that a rise in the host (remittance‐sending) country's GNI per capita motivates migrants to remit more. Real exchange rates and real interest rates have no effect on remittances. These results indicate that altruism is an important and critical component of motivations behind remittances. However, altruism alone does not appear to be a sufficient explanation of the motivations behind remittances. Other incentives such as loan repayment and investment play a non‐negligible role in this regard as well. The degree of altruism is higher for migrants from developing countries in comparison with migrants from developed countries, and it is higher when we define remittances as “personal transfers” rather than “personal transfers and compensation of employees.” The results of the vector error correction model show if remittances deviate from the equilibrium relationship, they will eventually revert.

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  • Seyedsoroosh Azizi, 2019. "Why do migrants remit?," The World Economy, Wiley Blackwell, vol. 42(2), pages 429-452, February.
    • Handle: RePEc:bla:worlde:v:42:y:2019:i:2:p:429-452
    DOI: 10.1111/twec.12681
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    Cited by:

    1. Uweis Abdulahi Ali Bare & Yasmin Bani & Normaz Wana Ismail & Anitha Rosland, 2021. "Remittances And Health Outcomes In Sub-Saharan African Countries: Understanding The Role Of Financial Development And Institutional Quality," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 66(229), pages 119-144, April – J.
    2. Tigran Poghosyan, 2023. "Remittances in Russia and Caucasus and Central Asia: The gravity model," Review of Development Economics, Wiley Blackwell, vol. 27(2), pages 1224-1241, May.
    3. Seruca, Manuel & Mota, Andrade & Rodrigues, David, 2019. "Solving the Economic Scheduling of Grid-Connected Microgrid Based on the Strength Pareto Approach," MPRA Paper 95391, University Library of Munich, Germany.
    4. SeyedSoroosh Azizi, 2021. "The impacts of workers’ remittances on poverty and inequality in developing countries," Empirical Economics, Springer, vol. 60(2), pages 969-991, February.
    5. Junaid Ahmed & Mazhar Mughal & Inmaculada Martínez‐Zarzoso, 2021. "Sending money home: Transaction cost and remittances to developing countries," The World Economy, Wiley Blackwell, vol. 44(8), pages 2433-2459, August.
    6. Anthony Enisan Akinlo & Michael Segun Ojo, 2021. "Examining the asymmetric effects of oil price shocks on remittances inflows: evidence from Nigeria," SN Business & Economics, Springer, vol. 1(10), pages 1-16, October.
    7. Nakamura, Nobuyuki & Suzuki, Aya, 2022. "How Altruism Works during a Pandemic: Examining the Roles of Financial Support and Degrees of Individual Altruism on International Remittance," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322073, Agricultural and Applied Economics Association.
    8. Sven Steinkamp & Frank Westermann, 2022. "Development aid and illicit capital flight: Evidence from Nepal," The World Economy, Wiley Blackwell, vol. 45(7), pages 2305-2336, July.
    9. Abokyi, Eric, 2023. "Effects of remittances on financial inclusion gender gap in developing countries," Research in Economics, Elsevier, vol. 77(1), pages 1-24.
    10. Mahdavi, Sadegh & Bayat, Alireza & Mirzaei, Farzad, 2019. "Economic Operation of Grid-Connected Microgrid By Multiverse Optimization Algorithm," MPRA Paper 95893, University Library of Munich, Germany.
    11. Hou, Yulin & Jia, Shaomeng, 2023. "Do remittances react to commodity windfall? Evidence from Latin America and the Caribbean," Economic Modelling, Elsevier, vol. 121(C).
    12. Bayat, Alireza & Khazaei, Ehsan & Mahdavi, Sadegh, 2019. "Economic-Based Synchronization and Control of New Fractional-Order Chaotic System Based on Lyapunov Theorem," MPRA Paper 95394, University Library of Munich, Germany.
    13. Uche Eseosa Ekhator-Mobayode & Seyedsoroosh Azizi, 2019. "Does the Presence of Neighborhood Gang Affect Youth Criminal Behavior?," Economics Bulletin, AccessEcon, vol. 39(3), pages 2102-2109.
    14. Wu, Chen & Nsiah, Christian & Fayissa, Bichaka, 2023. "Analyzing the differential impacts of financial sector development on remittance inflows," Research in Economics, Elsevier, vol. 77(2), pages 239-250.

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