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The volatility effect of diaspora’s location: A migration portfolio approach

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  • Eric Rougier
  • Nicolas Yol

Abstract

Remittances can transmit volatility from migrants’ host countries to migrant’s home country for some common patterns of a country diaspora’s geographical distribution. In a migration portfolio model, the overall risk of volatility of any set of diaspora location is decomposed into a contagion and a concentration risks: a diaspora located in more volatile destinations induces a higher contagion risk, while a diaspora located in few destination countries increases the concentration risk. A series of estimations on a panel of 93 countries over 1995-2015 provide evidence for these two risks and their cumulative effects. Estimation of a structural model confirms that the geography of diaspora has an indirect impact on the origin country’s aggregate instability through remittances.

Suggested Citation

  • Eric Rougier & Nicolas Yol, 2018. "The volatility effect of diaspora’s location: A migration portfolio approach," Cahiers du GREThA 2018-09, Groupe de Recherche en Economie Théorique et Appliquée(GREThA).
  • Handle: RePEc:grt:wpegrt:2018-09
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    More about this item

    Keywords

    Migration; remittances; macroeconomic volatility;

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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