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The volatility effect of diaspora's location

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  • Éric Rougier
  • Nicolas Yol

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

Remittances can transmit volatility from host to home countries for some common patterns of diaspora's geographical distribution. In a migration portfolio model, the overall risk of volatility of any set of diaspora location is decomposed into a contagion and a concentration risks: a diaspora located in more volatile destinations induces a higher contagion risk, while a diaspora located in few destination countries increases the concentration risk. A series of estimations on a large panel of developing countries over 1995–2015 provide evidence for these two risks. Estimation of a structural model confirms that the geography of diaspora has an indirect impact on the origin country's aggregate instability through remittances.

Suggested Citation

  • Éric Rougier & Nicolas Yol, 2018. "The volatility effect of diaspora's location," Post-Print hal-03613528, HAL.
    • Handle: RePEc:hal:journl:hal-03613528
    DOI: 10.1111/twec.12773
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03613528
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    More about this item

    Keywords

    diaspora; fluctuations; income volatility; migration; portfolio choice; remittances;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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