The Macroeconomic Determinants of Emigrant Remittances

El-Sakka, Mohammed; McNabb, Robert

doi:10.1016/s0305-750x(99)00067-4

Cited by 250 publications

(178 citation statements)

References 14 publications

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Section: Microeconomic Motives and Macroeconomic Variablesmentioning

confidence: 99%

“…The returns in home and host country assets may be captured by the home and host countries' deposit or lending interest rates. In the literature this is often captured by the interest rate differential between the home and host countries (FAINI, 1994;EL-SAKKA and MCNABB, 1999).The cost of remitting is difficult to calculate in a macroeconomic study; one way to deal 8 with this problem is to use a proxy, for example, the distance between the home and host country (LUETH and RUIZ-ARRANZ, 2008;FRANKEL, 2011). …”

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confidence: 99%

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A gravity model of remittance determinants: evidence from Latin America and the Caribbean

2016

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Given the importance of remittances it is crucial for the governments and the financial sectors in the region to recognize the specificity of each kind of remittance. A systematic analysis of the determinants of remittances would provide invaluable insights to policy makers and contribute to the design of more appropriate regulations. This in turn can promote an effective strategy for the mobilisation of remittances. In this paper the macroeconomic determinants of remittances are estimated for a set of Latin American and Caribbean countries. Generally two approaches to modelling the determinants of remittances have been undertaken in the empirical literature. First a microeconomic approach utilising household survey data (DE LA BRIÈRE, 2002; AMUENDO-DORANTES and POZO;YANG, 2008). Second a macroeconomic approach which uses balance of payments data (VARGAS-SILVA and HUANG, 2006; ADAMS, 3 2009). A third approach which combines a microeconomic foundation with macroeconomic data has been gaining some momentum (RAPOPORT and DOCQUIER, 2005; SCHIOPU and SIEGFRIED, 2006). It is this latter approach upon which the current study is based.A panel data set of bilateral remittance flows from 18 industrialised remittance sending countries 3 to 27 remittance receiving Latin American and Caribbean (LAC) countries 4 over the period 1998 to 2007 is utilised to study the determinants of remittances. This paper makes several contributions to the literature on remittances.Generally research on remittances in the LAC region is concentrated on a single country or a minority of countries (SAYAN et al., 2010;VARGAS-SILVA and HUANG, 2006; CASTILLO-PONCE et al, 2011). A number of studies have used bilateral data to study remittances (LUETH and RUIZ-ARRANZ, 2008;FRANKEL, 2011; DOCQUIER et al, 2012). These studies feature selected Latin American countries as part of a larger data set that focuses on developing countries in general. In this study a new measure of bilateral remittances is proposed, one that is based on the assumption that aggregate remittance inflows for a country are directly linked to the pattern of a migrating population. This makes it possible to derive bilateral estimates of remittances for a larger group of countries in the LAC region than has been available previously.Second, the effect on remittances is examined for a comprehensive set of economic, demographic and risk related factors (both man-made and natural). This is unlike earlier studies which tend to ignore the potential effects of demographic and/or risk related factors that may be important in capturing altruistic and investment motivations (VARGAS-SILVA and HUANG, 2006; LIN, 2011). Finally, microeconomic 4 theory provides the foundation for exploring the motives for remittances, which are then captured in a model comprising macroeconomic variables. Previous macroeconomic studies of remittances tend to utilise a reduced form equation for remittance with little or no reference to the underlying microeconomic foundations (HIGGINS et al, 2009;FONCHAMYO,...

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Section: Microeconomic Motives and Macroeconomic Variablesmentioning

confidence: 99%

mentioning

confidence: 99%

A gravity model of remittance determinants: evidence from Latin America and the Caribbean

2016

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“…In this paper, this second path is followed in an attempt to better understand how the macroeconomic and political environment affect remittance flows to the countries in the Sub Saharan African Region. Macroeconomic studies have emphasized determinants such as the level of economic activity in the host and the home countries, the wage rate, inflation, interest rate differentials and the efficiency of the banking system (El-Sakka and McNabb, 1999). Wahba (1991) suggested that political stability, consistency in government policies and financial intermediation have a significant influence on the flow of remittances.…”

Section: Empirical Literaturementioning

confidence: 99%

The Altruistic Motive of Remittances: A Panel Data Analysis of Economies in Sub Saharan Africa

Fonchamnyo¹

2012

IJEF

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Remittances have become an important source of foreign exchange earnings in many countries as migrants continue to send income to relatives at home. However, the main motives for sending remittances remain controversial. This paper examines the relative importance of the socio-political and economic determinants of remittance inflow using an unbalance panel data of 36 economies in the Sub Saharan African Region in an attempt to assess the altruistic motive of remittance inflow. The results using a random effect estimation technique show that altruism is important for remitting, as the per capita income differential between host and home country and the age dependency ratio are positive and statistically significant. The level of per capita income of the home country is also found to be negative and statistically significant which also supports the altruistic motive of remittances. The results further suggest that the development of the financial sector and the proportion of Catholics in the population will encourage remittance inflow. These results are robust to the different specifications and estimation methodology.

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“… the level of economic activity in the host country and in the country of origin;  the differential among wage rates, inflation and interest (Glytsos & Katselli, 1986;Swamy, 1981;Elbadawi & Rocha, 1992;El-Sakka & McNabb, 1999), and the exchange rate (Faini, 1994;Lianos, 1997);  the efficiency of the banking system and political stability (Wahba, 1991).…”

Section: Reasons For Migration and Remittancesmentioning

confidence: 99%

Migrant’s Domestic Work and Remittances: The Results of an Empirical Study

2012

CUBR

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The migration is a complex phenomenon which causes a range of effects in the host countries as in homeland.Every day, a lot of people move from one country to another for economic or political reasons, with or without a visa, and this unstoppable flow gives birth to problems that are often difficult to solve. If the role of migrates is important for the host countries, it will be essential to check which is the advantage that can result in homeland.Even considering that the international movement of labour, especially the qualified one, may be a limit to the growth of homeland, it cannot recognize the weight that remittances can have for its realization. Migrant women, employed mainly in domestic work, support the shortcomings of the welfare systems of host countries and contribute in homeland to improve families and, from a certain point of view, the local economy. This work is organized in a theoretical and empirical part, which is based on a direct investigation on the region of Apulia's capital. The purpose of this paper is to check if remittances mostly undervalued because much more is believed through informal channels, results in consumption and/or productive investment.

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The Macroeconomic Determinants of Emigrant Remittances

Cited by 250 publications

References 14 publications

A gravity model of remittance determinants: evidence from Latin America and the Caribbean

A gravity model of remittance determinants: evidence from Latin America and the Caribbean

The Altruistic Motive of Remittances: A Panel Data Analysis of Economies in Sub Saharan Africa

Migrant’s Domestic Work and Remittances: The Results of an Empirical Study

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