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Business Cycles and Workers' Remittances; How Do Migrant Workers Respond to Cyclical Movements of GDP At Home?

  • Serdar Sayan

Workers' remittances are often argued to have a tendency to move countercyclically with the GDP in recipient countries since migrant workers are expected to remit more during down cycles of economic activity back home. Yet, how much to remit is a complex decision involving other factors, and different variables driving remittance behavior are differently affected by the state of economic activity over the business cycle. This paper investigates the behavior of workers' remittances flows into 12 developing countries over their respective business cycles during 1976-2003 and finds that countercyclicality of receipts is not commonly observed across these countries.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/52.

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Length: 21
Date of creation: 01 Feb 2006
Date of revision:
Handle: RePEc:imf:imfwpa:06/52
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  1. Bilin Neyapti & Kivilcim Metin-Ozcan & Osman Tuncay Aydas, 2004. "Determinants of Workers Remittances : The Case of Turkey," Working Papers 0405, Department of Economics, Bilkent University.
  2. Finn E. Kydland & Edward C. Prescott, 1990. "Business cycles: real facts and a monetary myth," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 3-18.
  3. Lucas, Robert E., 1977. "Understanding business cycles," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 5(1), pages 7-29, January.
  4. Samir Jahjah & Ralph Chami & Connel Fullenkamp, 2003. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Working Papers 03/189, International Monetary Fund.
  5. Reinhart, Carmen & Kaminsky, Graciela & Vegh, Carlos, 2004. "When it rains, it pours: Procyclical capital flows and macroeconomic policies," MPRA Paper 13883, University Library of Munich, Germany.
  6. Kuckulenz, Anja & Buch, Claudia M., 2004. "Worker Remittances and Capital Flows to Developing Countries," ZEW Discussion Papers 04-31, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  7. Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
  8. C. Emre Alper, 2002. "Business Cycles, Excess Volatility, and Capital Flows: Evidence from Mexico and Turkey," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 38(4), pages 25-58, August.
  9. Buch, Claudia M. & Kuckulenz, Anja & Le Manchec, Marie-Helene, 2002. "Worker Remittances and Capital Flows," Kiel Working Papers 1130, Kiel Institute for the World Economy (IfW).
  10. Pallage, Stephane & Robe, Michel A, 2001. "Foreign Aid and the Business Cycle," Review of International Economics, Wiley Blackwell, vol. 9(4), pages 641-72, November.
  11. Russell, Sharon Stanton, 1986. "Remittances from international migration: A review in perspective," World Development, Elsevier, vol. 14(6), pages 677-696, June.
  12. Bernd Lucke, 2005. "Is Germany's GDP Trend-Stationary? A Measurement-With Theory Approach," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 225(1), pages 60-76, January.
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