The Economics of Migrants' Remittances

By Hillel Rapoport, Frédéric Docquier. Social Science Research Network, 2005

943 citations recorded by the source corpus.

This chapter reviews the recent theoretical and empirical economic literature on migrants' remittances. It is divided between a microeconomic section on the determinants of remittances and a macroeconomic section on their growth effects. At the micro level we first present in a fully harmonized framework the various motivations to remit described so far in the literature. We show that models based on different motives share many common predictions, making it difficult to implement truly discriminative tests in the absence of sufficiently detailed data on migrants and receiving households' characteristics and on the timing of remittances. The results from selected empirical studies show that a mixture of individualistic and familial motives explains the likelihood and size of remittances. At the macro level we first briefly review the standard (Keynesian) and the trade-theoretic literature on the short-run impact of remittances. We then use an endogenous growth framework to describe the growth potential of remittances and present the evidence for different growth channels. We then explore the relationship between remittances and inequality. This relationship appears to be non-monotonic. This is consistent with different theoretical arguments regarding the role of migration networks and/or the dynamics of wealth transmission between successive generations.

Subfields: Economics and Econometrics, Information Systems, Sociology and Political Science

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Citations in the corpus

Tradable Immigration Quotas (2014, neutral): “See also Rapoport and Docquier (2006) for a survey of the literature on migrants remittances.”
Remittances, Liquidity Constraints and Human Capital Investments in Ecuador (2009, neutral): “Key words — migration, remittances, trans-national networks, human capital, Latin America, Ecuador”
Remittances and Financial Development:;Substitutes or Complements in Economic Growth? (2012, neutral): “As it is well documented, access to credit is one of the major constraints for entrepreneurial activities in developing countries (Rapoport and Docquier 2005).”
Macroeconomic determinantsof workers' remittances: Hostversus home country's economic conditions (2006, methodology): “Therefore, remittances should not respond to changes in the macroeconomic conditions of the host and/or home country (see Poirine, 1997 and Rapoport & Docquier, 2005, for more on the loan repayment hypothesis).”
Can migration reduce educational attainment? Evidence from Mexico (2006, background): “(2008) for the Philippines, and Rapoport and Docquier (2006) for a survey of the remittances literature.”
The Determinants of Migrant Remittances (2008, background): “Over the past two decades, several dozen papers have set out to analyse empirically the determinants of remittances with reference to the framework outlined by Lucas and Stark (for reviews, see Hagen-Zanker and Siegel, 2007; Rapoport and Docquier, 2006 ).”
Assessing the Impact of Remittances on Schooling: the Mexican Experience (2005, background): “Rapoport and Docquier (2003) survey the motivation to send remittances back to their families and what actually happens with the human capital formation of those members of such families left at home.”
Evaluating the Economic Impact of International Remittances On Developing Countries Using Household Surveys: A Literature Review (2011, methodology): “According to a comprehensive review by Rapoport and Docquier (2006), these theoretical reasons for remitting include: (a) altruism, the desire of the migrant to help family members at home; (b) insurance, whereby migrants remit to insure their family against adverse risks and shocks at home; and…”
Remittances and inequality: a dynamic migration model (2010, background): “We build on an important theoretical and empirical proposition of the migration literature, namely that migration and remittances are part of an implicit familial arrangement in a context of credit market imperfections [27, 30].”