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Bank accounts and savings - the impact of remittances and migration: a case study of Moldova

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  • Rios Avila, Fernando
  • Schlarb, Eva

Abstract

In many developing countries, the formal financial sector is underdeveloped and majority of the population does not have access to it. This paper analyzes the empirical link between remittances and financial sector development on a microeconomic level. Using a unique household dataset for Moldova, we find that receiving monetary remittances has a positive and significant effect on the probability of having a bank account, thereby promoting financial sector development. Furthermore, we show that remittances tend to have an even higher positive effect on household savings, which is a sign for a hidden potential for financial sector development.

Suggested Citation

  • Rios Avila, Fernando & Schlarb, Eva, 2008. "Bank accounts and savings - the impact of remittances and migration: a case study of Moldova," Kiel Advanced Studies Working Papers 448, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwasw:448
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    1. Edwin Le Heron & Nicolas Yol, 2019. "The macroeconomic effects of migrants' remittances in Moldova: a stock–flow consistent model," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 16(1), pages 31-54, April.
    2. Luecke, Matthias & Omar Mahmoud, Toman & Steinmayr, Andreas, 2009. "Labour migration and remittances in Moldova: Is the boom over?: Trends and preliminary findings from the IOM-CBSAXA panel household survey 2006- 2008," Open Access Publications from Kiel Institute for the World Economy 32525, Kiel Institute for the World Economy (IfW Kiel).
    3. Siegel, Melissa & Lücke, Matthias, 2009. "What determines the choice of transfer channel for migrant remittances? The case of Moldova," Kiel Working Papers 1515, Kiel Institute for the World Economy (IfW Kiel).

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