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Exchange-rate uncertainty and workers' remittances

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  • Matthew Higgins
  • Alketa Hysenbegasi
  • Susan Pozo

Abstract

A panel of nine Western Hemisphere nations is employed to test the proposition that the remittances of immigrants respond to risk variables, in particular to exchange-rate uncertainty. To estimate annual exchange-rate uncertainty, a nonparametric estimator based on monthly exchange rate returns is used. Also the instrumental variables procedure of Pagan and Ullah (Journal of Applied Econometrics, 3, 87-105, 1988) is employed to insure that the conclusions are robust to possible error in the measurement of exchange-rate uncertainty. The results give credence to the 'new economics of migration' approach which argues that immigrants are highly motivated by portfolio variables.

Suggested Citation

  • Matthew Higgins & Alketa Hysenbegasi & Susan Pozo, 2004. "Exchange-rate uncertainty and workers' remittances," Applied Financial Economics, Taylor & Francis Journals, vol. 14(6), pages 403-411.
    • Handle: RePEc:taf:apfiec:v:14:y:2004:i:6:p:403-411
    DOI: 10.1080/09603100410001673630
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    References listed on IDEAS

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