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Estimating the Determinants of Remittances Originating from U.S. Households using CPS Data

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  • Simpson, Nicole B.

    (Colgate University)

  • Sparber, Chad

    (Colgate University)

Abstract

The U.S. is the largest source country of remittances with an outflow of more than $70 billion estimated for 2016 (according to data from the World Bank). This paper is the first to use Current Population Survey (CPS) data to estimate the determinants of remittances originating from the United States for a diverse set of approximately 3,800 households with at least one foreign-born worker. We employ a gravity model examining the role of various push, pull, and distance factors. Most notably, higher household earnings push monetary transfers abroad: We estimate an average earnings elasticity in the range of 0.20-0.30. Remittances are more responsive to earnings in households with more adult women relative to men.

Suggested Citation

  • Simpson, Nicole B. & Sparber, Chad, 2019. "Estimating the Determinants of Remittances Originating from U.S. Households using CPS Data," IZA Discussion Papers 12480, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12480
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    Cited by:

    1. Imran Khan & Darshita Fulara Gunwant, 2023. "Is the remittance inflow to the Turkish economy sustainable? A glimpse of the future through the lens of the past," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 25(1), pages 34-51, June.
    2. Peter Nderitu GITHAIGA, 2019. "Foreign Remittances, Private Sector Investment and Banking Sector Development," Journal of Economics and Financial Analysis, Tripal Publishing House, vol. 3(2), pages 85-112.
    3. Nianzhai Ma & Weizeng Sun & Zhen Wang, 2022. "Host Identity and Consumption Behavior: Evidence from Rural–Urban Migrants in China," Sustainability, MDPI, vol. 14(19), pages 1-25, September.
    4. Adriana R. Cardozo Silva & Luis R. Diaz Pavez & Inmaculada Martínez‐Zarzoso & Felicitas Nowak‐Lehmann, 2022. "The impact of COVID‐19 government responses on remittances in Latin American countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(4), pages 803-822, May.
    5. Emara, Noha & Zhang, Yuanhao, 2021. "The non-linear impact of digitization on remittances inflow: Evidence from the BRICS," Telecommunications Policy, Elsevier, vol. 45(4).
    6. Dinarte Diaz,Lelys Ileana & Jaume,David Jose & Medina-Cortina,Eduardo & Winkler,Hernan, 2022. "Neither by Land nor by Sea : The Rise of Electronic Remittances during COVID-19," Policy Research Working Paper Series 10057, The World Bank.
    7. Ayaz Ahmed & Nasir Iqbal & Ghulam Mustafa, 2020. "Measuring the Impact of Remittances on Housing Demand: Evidence from Large Cities in Pakistan," PIDE-Working Papers 2020:10, Pakistan Institute of Development Economics.

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    More about this item

    Keywords

    remittances; immigration;

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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