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A Theory of Workers' Remittances with An Application to Morocco

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  • Jacques Bouhga-Hagbe

Abstract

This paper provides a model on how altruism, "attachment" to the home country, and portfolio diversification may act as potential motives behind workers' remittances. It shows that the level of workers' remittances depends on how great are their degrees of altruism and "attachment" to their home country, and should also depend on interest rate differentials between the home country and the country of residence if portfolio diversification motives are significant in the decision to remit. The model is applied to Morocco using co-integration techniques. The paper then discusses the stability of remittances in Morocco and the policy implications in light of the empirical findings.

Suggested Citation

  • Jacques Bouhga-Hagbe, 2004. "A Theory of Workers' Remittances with An Application to Morocco," IMF Working Papers 04/194, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:04/194
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. International Monetary Fund, 2005. "Republic of Tajikistan; Selected Issues and Statistical Appendix," IMF Staff Country Reports 05/131, International Monetary Fund.
    2. Jonathan Yoder & Adam McCoy & Mudziviri Nziramasanga, 2008. "The check is in the mail: Household characteristics and migrant remittance from the U.S. to Mexico," Working Papers 2008-1, School of Economic Sciences, Washington State University.
    3. Naheem Mahtab, 2015. "The Effect of Macroeconomic Variables on the Inflow of Remittance in Bangladesh," Economy, Asian Online Journal Publishing Group, vol. 2(1), pages 21-31.
    4. Jellal, Mohamed, 2014. "Diaspora famille transferts et contrat implicite
      [Diaspora famille and transfers as implicit cintract]
      ," MPRA Paper 57387, University Library of Munich, Germany.
    5. Marta Ruiz-Arranz & Erik Lueth, 2007. "Are Workers' Remittances a Hedge Against Macroeconomic Shocks? the Case of Sri Lanka," IMF Working Papers 07/22, International Monetary Fund.
    6. Neagu , Ileana C. & Schiff, Maurice, 2009. "Remittance stability, cyclicality and stabilizing impact in developing countries," Policy Research Working Paper Series 5077, The World Bank.
    7. Carlos Vargas-Silva & Peng Huang, 2006. "Macroeconomic determinantsof workers' remittances: Hostversus home country's economic conditions," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 15(1), pages 81-99.
    8. Jacques Bouhga-Hagbe, 2006. "Altruism and Workers’ Remittances; Evidence from Selected Countries in the Middle East and Central Asia," IMF Working Papers 06/130, International Monetary Fund.
    9. Mohammad Reza Farzanegan & Sherif Maher Hassan, 2016. "How does the Flow of Remittances Affect the Trade Balance of the Middle East and North Africa?," CESifo Working Paper Series 6172, CESifo Group Munich.
    10. Michael T. Gapen & Thomas F. Cosimano & Ralph Chami, 2006. "Beware of Emigrants Bearing Gifts; Optimal Fiscal and Monetary Policy in the Presence of Remittances," IMF Working Papers 06/61, International Monetary Fund.
    11. Safaa Tabit & Charaf-Eddine Moussir, 2016. "Macroeconomic Determinants of Migrants’ Remittances: Evidence from a Panel of Developing Countries," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 6(7), pages 1-11, July.
    12. Lueth Erik & Ruiz-Arranz Marta, 2008. "Determinants of Bilateral Remittance Flows," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 1-23, October.
    13. International Monetary Fund, 2006. "Determinants of Emigrant Deposits in Cape Verde," IMF Working Papers 06/132, International Monetary Fund.
    14. Erik Lueth & Marta Ruiz-Arranz, 2006. "A Gravity Model of Workers’ Remittances," IMF Working Papers 06/290, International Monetary Fund.
    15. Fida Karam, 2011. "Trade Liberalization and the Skill Composition of Migrant Flows: the Case of Morocco," Working Papers 595, Economic Research Forum, revised 07 Jan 2011.
    16. Barua, Shubhasish & Majumder, Md. Alauddin & Akhtaruzzaman, Dr. Md., 2007. "Determinants of Workers’ Remittances in Bangladesh: An Empirical Study," MPRA Paper 15080, University Library of Munich, Germany.
    17. Alexei P Kireyev, 2006. "The Macroeconomics of Remittances; The Case of Tajikistan," IMF Working Papers 06/2, International Monetary Fund.
    18. Izabela Sobiech, 2015. "Remittances, finance and growth: does financial development foster remittances and their impact on economic growth," FIW Working Paper series 158, FIW.

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