Do Remittances Diminish Social Violence?

This paper represents the first attempt to formalise the relationship between remittances and social violence by developing a model that predicts that migrants' remittances lead to the reduction of social violence in the recipient economy under the condition that remittances increase the average product of labour. Using homicide data as an indicator of social violence, we tested our model's prediction. Controlling for the endogeneity problem with appropriate instruments, we found that remittances tend to reduce social violence. We performed sensitivity analysis on remittances in the empirical specification and found it robust with an unchanged negative sign.