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Migration and remittances : causes and linkages

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  • Niimi, Yoko
  • Ozden, Caglar

Abstract

The authors empirically examine the determinants of remittance flows at the cross-country level. They consider, among other things, the significance of the level of migration, the education level of migrants, and financial sector development in determining remittances. Given the potential endogeneity problems, the migration and financial development variables are instrumented in the estimation. They find that the migration level is the main driver of remittance flows, even after controlling for the endogeneity bias through instrumental variable estimation. The authors also find that the education level of migrants relative to the population in home countries, the size of the economy, and the level of economic development of recipient countries adversely affect remittance flows. While they find the effect of financial sector development to be positive, its significance is not strongly supported in their analysis.

Suggested Citation

  • Niimi, Yoko & Ozden, Caglar, 2006. "Migration and remittances : causes and linkages," Policy Research Working Paper Series 4087, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4087
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    References listed on IDEAS

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    1. McKenzie, David, 2007. "Paper Walls Are Easier to Tear Down: Passport Costs and Legal Barriers to Emigration," World Development, Elsevier, vol. 35(11), pages 2026-2039, November.
    2. Ilahi, Nadeem & Jafarey, Saqib, 1999. "Guestworker migration, remittances and the extended family: evidence from Pakistan," Journal of Development Economics, Elsevier, vol. 58(2), pages 485-512, April.
    3. El-Sakka, M. I. T. & McNabb, Robert, 1999. "The Macroeconomic Determinants of Emigrant Remittances," World Development, Elsevier, vol. 27(8), pages 1493-1502, August.
    4. 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.
    5. Freund, Caroline & Spatafora, Nikola, 2005. "Remittances : transaction costs, determinants, and informal flows," Policy Research Working Paper Series 3704, The World Bank.
    6. Matthew Higgins & Alketa Hysenbegasi & Susan Pozo, 2004. "Exchange-rate uncertainty and workers' remittances," Applied Financial Economics, Taylor & Francis Journals, vol. 14(6), pages 403-411.
    7. Aggarwal, Reena & Demirguc-Kunt, Asli & Martinez Peria, Maria Soledad, 2006. "Do workers'remittances promote financial development ?," Policy Research Working Paper Series 3957, The World Bank.
    8. Agarwal, Reena & Horowitz, Andrew W., 2002. "Are International Remittances Altruism or Insurance? Evidence from Guyana Using Multiple-Migrant Households," World Development, Elsevier, vol. 30(11), pages 2033-2044, November.
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    Citations

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    Cited by:

    1. Bharati Basu & James T. Bang, 2013. "Insurance and remittances: New evidence from Latin American immigrants to the US," Migration Letters, Transnational Press London, UK, vol. 10(3), pages 383-398, September.
    2. Ziesemer, Thomas H.W., 2010. "The impact of the credit crisis on poor developing countries: Growth, worker remittances, accumulation and migration," Economic Modelling, Elsevier, vol. 27(5), pages 1230-1245, September.
    3. repec:rss:jnljfe:v2i3p5 is not listed on IDEAS
    4. Ahmed, Junaid & Martinez-Zarzoso, Inmaculada, 2014. "What drives bilateral remittances to Pakistan? A gravity model approach," Center for European, Governance and Economic Development Research Discussion Papers 209, University of Goettingen, Department of Economics.
    5. Mukhopadhyay, Sankar & Zou, Miaomiao, 2018. "Will Skill-Based Immigration Policies Lead to Lower Remittances? An Analysis of the Relations between Education, Sponsorship, and Remittances," IZA Discussion Papers 11330, Institute for the Study of Labor (IZA).
    6. Tchantchane, A. & Rodrigues, G. & Fortes, P.C., 2013. "An Empirical Study on the importance of Remittance and Educational Expenditure on Growth: Case of the Philippines," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 173-186.
    7. Bettin, Giulia & Lucchetti, Riccardo & Zazzaro, Alberto, 2012. "Financial development and remittances: Micro-econometric evidence," Economics Letters, Elsevier, vol. 115(2), pages 184-186.
    8. Houle, Rene & Schellenberg, Grant, 2008. "Remittance Behaviours Among Recent Immigrants in Canada," Analytical Studies Branch Research Paper Series 2008312e, Statistics Canada, Analytical Studies Branch.
    9. World Bank, 2008. "Turkey - Country Economic Memorandum : Volume 2. Sustaining High Growth, Selected Issues," World Bank Other Operational Studies 8017, The World Bank.
    10. Adams Jr., Richard H., 2009. "The Determinants of International Remittances in Developing Countries," World Development, Elsevier, vol. 37(1), pages 93-103, January.
    11. Ziesemer Thomas H.W., 2009. "Worker Remittances and Growth: The Physical and Human Capital Channels," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(6), pages 743-773, December.
    12. Ziesemer, Thomas H.W., 2012. "Worker remittances, migration, accumulation and growth in poor developing countries: Survey and analysis of direct and indirect effects," Economic Modelling, Elsevier, vol. 29(2), pages 103-118.
    13. Sule Akkoyunlu, 2010. "Are Turkish Migrants Altruistic?," KOF Working papers 10-246, KOF Swiss Economic Institute, ETH Zurich.
    14. Sami Ben Mim (ERUDITE) & Fatma Mabrouk (GREThA, CNRS, UMR 5113), 2011. "Remittances and economic growth: what channels of transmission? (In French)," Cahiers du GREThA 2011-28, Groupe de Recherche en Economie Théorique et Appliquée.
    15. Deodat E. Adenutsi & Meshach J. Aziakpono & Matthew K. Ocran, 2011. "The Changing Impact Of Macroeconomic Environment On Remittance Inflows In Sub-Saharan Africa," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 3(2 (July)), pages 136-167.
    16. Ibrahim Sirkeci & Jeffrey H. Cohen & Dilip Ratha, 2012. "Migration and Remittances during the Global Financial Crisis and Beyond," World Bank Publications, The World Bank, number 13092, September.
    17. Ravinder Rena, 2008. "Recent Trends in the World Economy: A Case Study of Africa," Journal of Global Economy, Research Centre for Social Sciences,Mumbai, India, vol. 4(2), pages 86-104, June.
    18. Giulia Bettin & Riccardo Lucchetti & Alberto Zazzaro, 2009. "Income, consumption and remittances: evidence from immigrants to Australia," Mo.Fi.R. Working Papers 34, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    19. Adams, Richard H., Jr., 2008. "The demographic, economic and financial determinants of international remittances in developing countries," Policy Research Working Paper Series 4583, The World Bank.

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    Keywords

    Population Policies; Remittances; Economic Theory&Research; Banks&Banking Reform; Achieving Shared Growth;

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