Melissa Siegel

The Determinants of Remittances: A Review of the Literature

In this paper we review the current state of literature on the determinants of remittances since it is important to understand remittance flows from a policy perspective since they affect the lives of so many people around the world. While the decision to remit may be clearly linked to the causes of migration, for example, in the theory the New Economics of Labour Migration, we take the causes of migration literature as given and broadly focus on the determinants of remittances. Most of the literature is based on empirical applications; hence we will focus on clearly summarising existing findings before comparing the results to our own. We start by giving the theoretical background of the determinants of remittances and then briefly discuss the literature that focuses on the macroeconomic level. We find the main theoretical determents of remittances to be altruism, insurance, the bequest motive, loan repayment, and the exchange motive. We then move to a more extensive section on the empirical applications of the micro-economic determinants of remittances. We conclude with a summary of findings from the literature.

The Age of Migration: International Population Movements in the Modern World, 4th Edition

Stephen Castles and Mark J. Miller, The Age of Migration: International Population Movements in the Modern World, 4th Edition Basingstoke: Palgrave Macmillan, 2009, 392 pp., £65.00 hb. (ISBN 978-0-...

Immigrant Integration and Remittance Channel Choice

This paper empirically analyses to what extent the level of immigrant integration determines the channel chosen to send remittances (migrant money transfers). In recent years, there has been a large push by the international community to formalize remittances. For this reason, it is important to take note of the effect immigrant integration can have on the remittance channel choice. The data used in this study stems from the Dutch Consumentenbond survey conducted in 2005 which was specifically designed to focus on migrant remittances. This paper investigates immigrant integration at the migrant group level as well as the individual level. For the analysis, a relative measure of immigrant integration is constructed for six migrants groups, making use of various variables, which include: educational attainment, language ability, work force participation, migration history, and others. This ranking is then used to test the affect of the integration of minority ethnic groups living in the Netherlands on remittance channel choice. We hypothesize that the more integrated an ethnic group is in Dutch society, the more likely they are to remit formally (send money transfers through formal institutions). There may be a shift from informal to formal remittances when policies which enhance integration are put into place. This paper finds that the impact of immigrant integration is conditional on other factors. If the migrant sending country has put into place institutional policies (such as banks from the sending country in the host country) to keep close ties to migrants via remittances or if there is lack of access in the recipient country to formal transfers, integration has almost no influence on the remittance channel decision. For this reason, a combination of policies would be best able to tackle the task of incentivizing migrants towards more formal transfers.

A Critical Discussion of the Motivations to Remit in Albania and Moldova

Since the 1980s, the theoretical and empirical literature on the motivations to remit has grown steadily. We review the microeconomic literature and show that the theoretical motivations to remit are overlapping while competing. We argue that in most cases this differentiation is unnecessary and makes the subsequent empirical applications weak. We apply the theories in Albania and Moldova, two countries that experience high migration and remittance flows, using household survey data. We focus on finding evidence for the theoretical motivations to remit such as altruism, loan repayment, co-insurance and the bequest motive and using a similar methodology and approach as previous empirical research. As for other empirical papers, the analysis leads to doubtful and multi-interpretable results. We argue that this problem is caused by weak operationalisation and inseparability of motives, compounded by data problems. Furthermore we argue that the decision to remit should not be looked at in isolation. It is apparent that the causes and patterns of migration in Albania and Moldova influence the remitting behaviour and most migrants migrate in order to remit. It is thus vital to link the decision to migrate with the decision to remit and to broaden the focus beyond the economic literature and consequently provide a more relevant and clearer answer to the question why remittances are sent.

New Technologies in remittances sending: Opportunities for mobile remittances in Africa

Mobile remittances have a high development potential as they hold the promise of providing quick, easy and cheap money transfers. In Africa, mobile phone usage has increased sharply and mobile banking providers are extending their services, therefore offering opportunities for mobile remittances. The rise of mobile banking in Africa, however, differs substantially across countries, mainly due to a lack of financial infrastructure. Consequently, the opportunities that mobile banking offers for mobile remittances vary geographically. The services provided do not always meet the needs of remittance senders and the African remittance market is generally under-acknowledged as an important market by providers. Restrictive financial regulations play a key role as well. Mobile remittances have the potential to become an important and revolutionary tool for remittance sending in Africa. Effective policies should therefore address the limitations in the regulatory and financial infrastructure for mobile banking to become the foundation for mobile remittances.

To return permanently or to return temporarily? Explaining migrants’ intentions

This paper explores migrants’ intentions to return to their origin country on either a permanent or temporary basis. The issue of return has played a key role in the debate on migration and development, but the role of temporary return in this process has seldom been addressed. We expand on the notion of return as an event or process that can be either permanent or temporary in nature, with both forms of return contributing to development processes. Using survey data from Afghan, Burundian, Ethiopian and Moroccan migrants in The Netherlands (N = 2745), we study how migrants’ experiences in countries of origin and destination are linked to their return intentions. We show that there are significantly more people interested in temporary than permanent return. Plus, while economic integration has no clear link with return intentions, individuals with lower socio-cultural integration are more likely to intend to return permanently. Moreover, social engagement in the homeland consistently positively relates to intentions for all types of return. Considering the potential positive impact of (temporary) return on development, this research provides insight into the profile of potential return migrants who could be facilitated to return by programs and policies that promote return for development.

The Influence of Vulnerability on Migration Intentions in Afghanistan

This study explores the influence of vulnerability on migration intentions within the context of Afghanistan. While it is commonplace to conceptualize migration as being driven by certain economic-related factors, it is reasonable to assume that in an insecure setting like Afghanistan, the difference between voluntary and involuntary movement is not easily distinguishable, making it necessary to approach the subject through a spectrum which does not presuppose migration is strictly economic in nature. With this in mind, we consider the issue through the broader lens of household vulnerability, a measure which incorporates a range of socio-economic factors allowing for a more comprehensive analysis. We first construct a profile of household vulnerability through individual indicators of deprivation along four principal dimensions, and then perform a regression analysis estimating the influence on migration intentions. Our results provide clear evidence that vulnerable households have a lower likelihood of concrete plans to migrate. This result supports the suggestion that it is not the ‘poorest of the poor’, or in our case the ‘most vulnerable of the vulnerable’ who aspire to move, indicating households have a realistic understanding of their capabilities taking into consideration the inherent costs and risks associated with cross-border movement.

Diaspora Engagement in India: From Non-Required Indians to Angels of Development

It has been mainly only in the last decade that India started to look seriously at a diaspora policy, which is quite late given the fact that it has had a large diaspora for centuries. For a long time India’s official position was that emigrants deserted their country and harmed the country’s interests. At the time of economic liberalization and globalization in the 1990s ethnic networks started to be seen as value-free networks which could serve as a resource. Concomitantly, the diaspora’s economic and political situation greatly improved. This led to a swift change in government’s perception of its own migrants, applauding their achievements with great pride. While in the past, overseas emigrants were often referred to as non-required Indians (a parody of the term non-resident Indian (NRI)), nowadays they are addressed as ‘angels of development’ (Khadria, 2008), a source of national pride, members of the Indian family or ‘Mother India’s Children’ (Sinha-Kerkhoff and Bal, 2003).

Diaspora Engagement and Policy in Ethiopia

Ethiopia is one of the largest and poorest countries in sub-Saharan Africa. Although Ethiopia has a low emigration rate at 0.7 per cent (World Bank, 2011), compared to other sub-Saharan African countries, due to its sheer population size of approximately 83 million people, it has a large diaspora community in absolute terms. The exact size of the diaspora is unknown, but is estimated to be 1–2 million people with large populations in the Middle East, North America and Europe. Ethiopians are the second largest group of sub-Saharan Africans in the United States (after Nigeria) and the fifteenth largest in Europe (AFTDC-AFTQK, 2007).

Does it matter where the children are? The wellbeing of elderly people ‘left behind’ by migrant children in Moldova

ABSTRACT This paper empirically evaluates the wellbeing of elderly individuals ‘left behind’ by their adult migrant children in Moldova. Using data from a nationally representative household survey conducted in 2011–12 in Moldova, the wellbeing outcomes of elderly individuals aged 60 and older with and without adult children living abroad are compared (N = 1,322). A multi-dimensional wellbeing index is constructed on the basis of seven indicators within four dimensions of wellbeing: physical health, housing, social wellbeing and emotional wellbeing. Probit regressions are used to predict the probability of an elderly individual being considered well in each indicator and then on total index level. The results reveal that elderly persons with an adult migrant child have a higher probability of being well in one physical health indicator. Following correction for the selectivity of migration using an instrumental variable approach, however, the migration of an adult child is no longer found to predict significantly the wellbeing of their elderly parents in any dimension, suggesting that migration bears limited consequences for elderly wellbeing.