Monetary Remittance - Romania Case Study

There is vast literature regarding the grounds of remittance. The best known and most often quoted article on the theme belongs to Lucas and Stark, who divided the grounds pursuant to which people remit money, into altruistic and personal grounds. At microeconomic level, the main beneficiaries of remittance are the remitters themselves and their close ones and, at macroeconomic level, the benefits are substantiated in the increase of domestic consumption, poverty decrease, recovery from macroeconomic shock or imbalance, support of the payment balance. The behavior of migrants who remit money to their country of origin is influenced by factors such as gender, age, educational level, civil status, family position, period of stay in the foreign country and the opportunities therein. The are about 3 million Romanians working abroad and remittance represents an economic advantage for the country, as it stimulates consumption and investments and improves society’s welfare. Remittance stands for an essential source of external funding for developing countries. During 2003 – 2013, Romanians abroad sent home over 54 billion Euro and the peak of the amounts sent by Romanian workers was reached in 2008 (7,765 billion Euro). Following economic crisis, remittance was drastically decreased by almost a half during the following year.