Overseas workers' remittances in Asian development

In recent years, overseas workers from Asia have been sending remittances of about $8 billion annually to their home countries. These remittances are an important source of precious foreign exchange for the major labor-exporting countries. The overall development impact of remittances, however, has not been well established. Remittances are spent primarily on day-to-day consumption expenditures, housing, land purchase, and debt repayment. Although only a small proportion of remittances are directed into productive investments, this does not warrant the conclusion that the developmental value of remittances is negligible. In fact, remittances spent on domestic goods and services Asia provide an important stimulus to indigenous industries and to the economies of the labor supplying countries. It is these broader macroeconomic benefits of remittances which seem to have been largely ignored in the literature, and this perhaps explains the pessimistic view of the developmental value of remittances. Reservations concerning the effects of remittance on the sending countries include the fears that 1) expenditure patterns of remittance receiving households may create a demonstration effect whereby nonmigrant households may increase consumption, 2) remittance inflow will increase income and wealth inequalities, 3) remittance expenditures may result in inflation, 4) remittances may produce only short-term fluctuations in long-term economic development, and 5) remittances may adversely affect agricultural development.     

Effects of Remittance Behavior on the Lives of Recent Immigrants to Canada from the Philippines: A Population-Based Longitudinal Study

Remittances, money sent by immigrants to family members in their countries of origin, were studied. Research goals were to (1) describe remittance behavior over time and (2) understand effects of sending remittances on the lives of remitters living in Canada. Data were obtained from three waves of the Longitudinal Survey of Immigrants to Canada (2000–2004) for a national sample of Canadian Filipino immigrants. Multivariate regression analyses were used to assess the effects of remittances on health, housing and living conditions of the study population. Results showed that over time respondents’ own health was not affected by remitting. In contrast housing and living conditions were affected: Remitters were less likely to own their homes and more likely to rent than non-remitters when the effects of age, sex, family income and immigration class were controlled. The researchers make suggestions for practice and future research dealing with housing and living conditions of recent immigrants to Canada.     

The new economics of labour migration and the role of remittances in the migration process

This analysis considers international migration remittances and their impact on development in migrant-sending areas. The new economics of labor migration (NELM) posit that remittances lessen production and market constraints faced by households in poor developing countries. The article states that remittances may be a positive factor in economic development, which should be nurtured by economic policies. The impact of remittances and migration on development varies across locales and is influenced by migrants' remittance behavior and by economic contexts. Criteria for measuring development gains may include assessments of income growth, inequity, and poverty alleviation. It is hard to gauge the level of remittances, especially when remittances may not flow through formal banking systems. The International Monetary Fund distinguishes between worker remittances sent home for over 1 year; employee compensation including the value of in-kind benefits for under 1 year; and the net worth of migrants who move between countries. This sum amounted to under $2 billion in 1970 and $70 billion in 1995. The cumulative sum of remittances, employee compensation, and transfers was almost $1 trillion, of which almost 66% was worker remittances, 25% was employee compensation, and almost 10% was transfers during 1980-95. Total world remittances surpass overseas development assistance. Remittances are unequally distributed across and between countries. Migration research does not adequately reveal the range and complexity of impacts. Push factors can limit options for use of remittances to stimulate development.     

“Here One Moment… and Gone the Next?” Remittance as a Social Visibility Tool

Human labor is as much an export as any good. Remittances are a critical source of income for left‐behind families and communities. Transnational labor migrants often describe themselves as ‘invisible’: neither present in the lives of left‐behind families nor members of the receiving community. Building on social remittances literature, we argue that remittances serve as a remedy for this ‘invisibility.’ Through analysis of interviews with 26 temporary labor migrants from 11 countries resident in Israel, we find remittances can render migrants visible to transnational families and provide identity benefits to labor migrants. If visibility benefits decline because of familial role changes, reduced value as a remitter, cost exceeding benefits or because contracting partners change, remittance practices will change. Contrary to previous literature, our findings show that remittances decisions are dynamic, revealing why remittances practices change and even cease. Findings have implications for understanding the multibillion‐dollar remittances industry and immigrant incorporation.     

Migration,development and remittances in rural Mexico

The argument is that remittances to Mexico from migrants in the US contribute to household prosperity and lessen the balance of payments problem. The purpose of this article is to provide an overview of the incentives and constraints to development and individual economic well-being in rural Mexico. Examination is made of the financial amount of remittances, the use of remittances, the impact on development of remittances, models of migration, and migration historically. The viewpoint is that migration satisfies labor needs in developed countries to the detriment of underdeveloped countries. $2 billion a year are sent by illegal migrants from the US to Mexico. This sum is 4 times the net earning of Mexico's tourist trade. 21.1% of the Mexican population depend in part on money sent from the US. 79% of illegal migrants remitted money to relatives in Jalisco state. 70% of migrant families receive $170/month. In Guadalupe, 73% of families depended on migrant income. In Villa Guerrero, 50% of households depended on migrant income. Migrant income supported 1 out of 5 households in Mexico. Money is usually spent of household subsistence items. Sometimes money is also spent on community religious festivals, marriage ceremonies, and education of children or improved living conditions. Examples are given of money being used for investment in land and livestock. Migration affects community solidarity, and comparative ethic, and the influence on others to migrate. Employment opportunities are not expanded and cottage and community industries are threatened. Land purchases did not result in land improvements. Migration models are deficient. There is a macro/micro dichotomy. The push-and-pull system is not controllable by individual migrants. The migration remittance model is a product of unequal development and a mechanism feeding migration. Mexican migration has occurred since the 1880's; seasonal migration was encouraged. There was coercion to return to Mexico after the economic recession of World War I; the door was firmly closely during the Great Depression of 1929-35. The 1980 estimates of illegal Mexican migrants totaled 2-9 million, which is the largest flow in the world. US industrial presence and Mexican development have reinforced migration flows. Regional and international capitalist requirements govern migration.     

Remittances and Other Financial Flows to Developing Countries

Official estimates of migrants’ remittances are around US$100 billion annually, with some 60 per cent going to developing countries. Any policy making use of migrants as a development resource must understand the size and allocation of remittances, and the roles played by migrants and their communities in the remittance process. This paper examines the flows of remittances in relation to other financial flows to developing countries. The examination is based on data available from official statistics. As discussed in the paper, remittances by unofficial channels are significant by all accounts so the remittance amounts reported here are quite conservative. The paper shows that annual remittances to developing countries have more than doubled between 1988 and 1999. Viewed over the last decade, remittances have been a much larger source of income for developing countries than official development assistance (ODA). The gap is increasing, since ODA has been falling while remittances have increased. Furthermore, remittances appear to be a much more stable source of income than private flows, both direct and portfolio, which tend to be more volatile and flow into a limited set of countries. Remittances to developing countries go first and foremost to lower middleincome and low–income countries. Lower middle–income countries receive the largest amounts, but remittances constitute a much higher share of total international flows to low–income countries. Of the ten countries receiving most remittances, two are low–income (India and Pakistan); six are lower middle–income (Philippines, Turkey, Egypt, Morocco, Thailand, and Jordan); and two are upper middle–income (Mexico and Brazil). Sub–Saharan Africa received some 8 per cent of remittances in 1980, but only some 4 per cent in 1999. South Asia’s share also declined from what was already a relatively high 34 to 24 per cent. Those who gained most were Eastern Europe and Central Asia, South and Central America, and the Caribbean, which increased their share of global remittances.     

Residential Remittances and Food Security in the Upper West Region of Ghana

In recent years, out migration from the Upper West Region to the southern belt of Ghana for farming has become commonplace. The natural question that has arisen is: what is the potential impact of remittances from this migration pattern on food security in the region? Using multivariate ordered logistic regression this study assesses the linkage between remittances and household food security (derived using the HFIAS) among urban and rural households (n=1,438) in the region. The findings show that urban remittance‐receiving households and rural remittance and non‐remittance receiving households were more likely (OR=2.44, p<0.05; OR=2.46, p<0.001; and OR=1.49, p<0.1, respectively) to report being more severely food‐insecure than urban non‐remittance receiving households. The findings demonstrate that household strategies such as migration and remittances on their own are not sufficient to ameliorate the precarious food insecurity situation of the region. The study calls for development of alternative livelihoods in the region.     

New Light on the Remittances‐Poverty‐Health Nexus in Macedonia

Macedonia receives about 10 per cent of GDP as cash remittances per year while a third of the population faces poverty. The study aims to investigate whether remittances improve the poverty and health of individual remittance‐receivers in Macedonia. To that end, we rely on the 2008 Remittances’ Survey and a sequential structural model linking remittances to social indicators. We find that remittances have a significant effect oto consumption, in particular health consumption, hence contribute to reducing poverty. In turn, improved health consumption significantly reduces the incidence of bad health among receivers. This finding lends support to the claim that remittances serve an informal social protection in Macedonia.     

The daughter‐in‐law questions remittances: changes in the gender of remittances among Indian migrants to Australia

In this article, I present a cross‐generational analysis of the gendered meanings and politics surrounding monetary remittances. Indian female migrants to Australia, who contribute significantly to household incomes, have recently started to question the sources and directions of remittances. This happens when the woman's earnings are sent, without consultation, to the husband's parents for luxuries, while the family in Australia is struggling. Women in paid work also want to send their earnings to their own parents, particularly if there is financial need. Remittances have become a testing ground for the traditional belief that the husband and his family own the money in the patrilineal marital household. It is possible to interpret male control of remittances without consultation as a form of financial abuse of the wife in the sending household. The article draws on two qualitative studies on five decades of Indian migration to Australia covering 203 people from 112 families.     

Remittances,Institutions and Growth in Africa

Remittances have become an important source of external finance in many developing countries. This article examines the relationship between remittances, institutions and economic growth in a panel of 26 African countries over the period 1980–2014. We apply the fixed effects (FE) and the two‐step system generalized method‐of‐moments (GMM) estimation methods. Our results show that there is a positive relationship between remittances and growth. We also find that institutions are an important determinant of economic growth. The interaction terms have a positive and statistically significant effect on economic growth. Thus, the growth effect of remittances is enhanced in the presence of strong institutions. Strong institutions are therefore germane in attracting greater remittance inflows to African countries. A clearer understanding of the channels through which remittance flows will enhance growth in African economies may assist policymakers to craft appropriate policies. In particular, a policy environment that promotes strong institutions would serve to attract more remittances.     

Socioeconomic Implications of the Increasing Foreign Remittance to Nepal: Evidence from the Nepal Living Standard Survey

The period since the 1990s witnessed a strong economic performance and labour demand in many countries in the Middle East, East Asia, and West, which coincided with the major political turmoil in Nepal causing enormous increase in emigration and foreign remittance. Using micro‐data for 1996 and 2004, this paper examines foreign remittance to Nepal and its socioeconomic implications. Data indicate that foreign remittance has helped increase income sizably and reduce poverty and income inequality marginally. Various family and individual characteristics are used to test whether the socioeconomically disadvantaged groups such as those with low non‐remittance income and assets, low caste and ethnic backgrounds, and from rural areas and remote regions benefited equally from foreign remittance. Analytical strategy involved estimating regressions of foreign remittance using the Generalized Least Squares estimator for families with foreign remittance and Three Stage Least Squares estimator for all families to minimize self‐selection and simultaneous causality bias. Although non‐remittance income and some of the low caste, ethnic, and spatiality backgrounds showed less consistent relationships, findings suggest that smaller families particularly with low asset‐holding and socioeconomic backgrounds were likely to receive less remittance. These findings highlight an important progress that the Nepali society is making toward levelling the playing field in foreign employment and remittance with migration to the regions and countries other than India offering better remittance prospects. Yet, further policy efforts are needed to ensure that foreign employment and remittance do not exacerbate the increasingly polarizing economic structure leaving the bottom sections of the society further worse off.     

Migrant Remittances as a Source of Financing for Entrepreneurship

The aim of this research is to analyse the likelihood of small business ownership by households receiving remittances in Uzbekistan. As such, this research has important policy implications. Small businesses are crucial for job creation and economic growth. This research shows that households receiving remittances invest in family business only when this inflow is supplemented with sufficient income or savings. Therefore, financial constraints are of paramount importance for a small business and these could be especially hard to overcome in rural areas. The article also finds evidence that remittance senders direct their funds into special business projects.     

Manpower export and economic development: evidence from the Philippines

The Philippines has actively pursued a policy of labor export with the expectation that it would relieve unemployment, augment the supply of skills, and relieve pressure on the balance of payments. It was also anticipated that the inflow of overseas workers' remittances would translate into increased investment, the sine qua non for economic development. However, recent evidence casts some doubt on the extent to which these goals have been achieved. Particularly in the areas of skill formation, there appears to be a significant discrepancy between anticipated and actual outcomes. Indeed, it appears that the labor export may reduce the supply of skills available since 1) many skilled and educated workers are taking jobs requiring skill levels lower than they possess, and 2) a large majority of returning workers do not want to take up employment in those occupations reliant on the skills they used abroad. There is conflicting evidence regarding the impact of labor export on Philippine industries. There is some anecdotal evidence that a few industries have suffered because of a loss of key workers. In general, however, it appears that unemployment is still quite significant in those occupations most heavily represented in labor export. Despite this observation, it may still be true that labor emigration is selective of only the best workers, implying a decline in quality of the work force and possibly productivity in certain industries. The export of professional, technical, and managerial workers is another issue. Unless it can be shown that these workers are in excess supply, it is not advisable to expand the number going abroad. Although their salaries may be higher, and hence their remittances greater, their loss can impose costs on indigenous industries well in excess of a any marginal gains. Remittances from overseas workers do constitute a relatively significant source of foreign exchange. However, the translation of remittances into investment has been restrained by the very low propensity of remittance recipients and returnees to undertake productive investment and by the diversion of remittances from formal banking channels into informal channels. Remittances which are being channeled through the formal banking sector constitute a potentially important source of loan funds, as well as providing a potential stimulus to indigenous industry.     

Remittances in Ghana: Origin, Destination and Issues of Measurement

Few studies on remittances have focused on sub-Saharan Africa. This paper analyses a nationwide survey of 5,998 households to determine the characteristics of both internal and overseas remittances in Ghana. Particular attention is paid to the poverty-alleviation potential of remittances. Furthermore, this study uses a smaller scale pilot project with a matched sample of senders and receivers of remittances to identify some problems with using household-level surveys to assess the volume and impact of overseas remittances, and offers some suggestions as to how to handle these problems. The paper estimates that foreign remittances may be three times as large as Bank of Ghana estimates, bringing Ghana on par with large remittance receiving countries such as the Philippines and Mexico. The paper concludes that while foreign remittances are larger in value, locally sent remittances reach poorer segments of the population. Both foreign and local remittances are unevenly geographically distributed, being received more in the centre and southern regions than in northern Ghana where the poorest regions are. The paper argues a need to study multiplier effects of foreign remittances, as these can be large and eventually accrue to rural populations.     

Remittances,Business Cycles and Poverty: The Recent Turkish Experience

We investigate whether remittances sent to Turkey by Turkish workers living in Germany are countercyclical or procyclical with Turkish and German national outputs and discuss possible reasons underlying the resulting patterns and their implications. We also take up a previously unexplored issue and discuss poverty alleviation potential of remittances at a macroeconomic level by examining the statistical properties of any co‐movements between remittances cycles and cycles in consumption spending on food and durable goods in Turkey. Our results reveal that real remittance flows from Germany to Turkey move procyclically with the real output in Turkey, and are primarily driven by (largely independent of) the developments in the Turkish economy (German economy). We also find that remittances cycles remain procyclical to the consumption cycles throughout our sample period. This direct co‐movement between the two cycles becomes synchronous, however, only after a phase shift occurring around 1992, pointing to the increasing role of the level of economic activity in Turkey as the leading determinant of remittance receipts from Germany and the declining strength of consumption smoothing motive over time. Our results all together point out a low potential for remittances sent from Germany to reduce poverty in Turkey, at least as far as the past fifteen years are concerned.     

Enhancing the capabilities of emigration countries to protect men and women destined for low-skilled employment: the case of the Philippines

This study examined policies in receiving countries, evaluated their effectiveness in protecting low skilled Filipino migrant workers, and discusses the potential for quantifying and objectifying labor migrant gains or losses. Data were obtained from focus groups among 10 technical managers of the Philippine Overseas Employment Administration and interviews with 10 policy-makers in order to establish a hierarchy of aims in labor migration and policy indicators. The aims are identified as good jobs abroad, an orderly process, efficient and fair recruitment, and easy transfers of remittances. Findings are that Philippine policies facilitate remittance transfers. Government was least effective in ensuring orderliness. Government was fairly effective in ensuring fairness and efficiency and ensuring good jobs overseas. It succeeded the most in ensuring that nationals can easily transfer their earnings. Allocation data reveal that more resources were expended on searching for good jobs and least on fairness and efficiency. Remittances increased after mandatory remittances were ended as imposed by the Marcos regime. De-skilling often resulted from overseas employment, but rehired workers received better pay on their second and third assignments. This research was exploratory and more research is needed for developing sensitive indicators and refining the process of evaluating key government policies. The Philippine Development Policy that encourages labor migration and protection of overseas workers is a necessity during the ongoing Asian economic crisis.     

The resilience of migrant money: how gender,generation and class shape family remittances in Peruvian migration

Scholars and policy makers have argued that because altruism drives remittance sending, migrant money is more resilient to uncertainty than other capital flows. In this article, I question this assumption through ethnographic examination of remittance sending by Peruvian migrant families. When in their lives do Peruvian migrants start to remit? Who are the recipients? What is the purpose of their remittances? How long do they last and why do they stop? I argue that, to answer these questions, we need to investigate how migrants make remittance commitments to different household members, how these attribute value to the remittances and how this value becomes the object of negotiation and contestation. The findings indicate that remittances reinforce existing relations of gender, generation and class in Peruvian society and suggest that while short‐lived remittances are based on contractual commitments and driven by altruism, long‐term remittances are based on emotional commitments and driven by both non‐utilitarian and utilitarian motives.     

Immigrant Remittances,Stability of Employment and Relative Deprivation

This paper examines the factors affecting immigrant remittances on the basis of the experience of immigrants to Greece. In addition to factors commonly used in similar analyses, we examine two new ones: stability of employment and relative deprivation. Our results show that the stability of employment has no significant effect on the decision to remit, while relative deprivation does. Immigrants from less relatively deprived families are more likely to send money back home. As for their effects on the size of remittances, our results show that the relative deprivation variable is insignificant, while those in steady jobs remit less money than those employed in unsteady jobs. The latter finding suggests that fluctuations in migrant employment and migrant income are borne by migrants themselves, whose goal appears to be to secure a steady flow of remittances to country of origin. This type of remittance behaviour has implications for the interpretation of volatility in remittance flows to migrant–sending countries. Specifically, variation in flows may be attributable to changes in the numbers of migrants and not only to changes in the economic and employment conditions in destination countries.     

New evidence on the role of remittances on healthcare expenditures by Mexican households

Using Mexico’s 2002 wave of the Encuesta Nacional de Ingresos y Gastos de los Hogares (ENIGH), we find that international remittances raise health care expenditures. Approximately 6 pesos of every 100 peso increment in remittance income are spent on health. The sensitivity of health care expenditures to variations in the level of international remittances is almost three times greater than their sensitivity to changes in other sources of household income. Furthermore, health care expenditures are less responsive to remittance income among lower-income households. Since the lower responsiveness may be partially due to participation of lower-income households in public programs like PROGRESA (now called Oportunidades), we also analyze the impact of remittances by health care coverage. As expected, we find that households with some kind of health care coverage—either through their jobs or via participation in PROGRESA—spend less of remittance income increments on health care than households lacking any health care coverage. Hence, remittances may help equalize health care expenditures across households with and without health care coverage.     

Determinants of remittances in Egypt: Do macroeconomic instability and oil price matter?

Emigration and resulting voluminous remittance inflows have been noticeable features of the Egyptian economy since the 1960s. The main purpose of this study is to investigate the determinants of remittances – primarily the role of both macroeconomic instability and oil price – in Egypt. Using autoregressive distributed lag (ARDL) bounds testing procedure, we estimated a remittance determination equation over the period from 1980 to 2015 and found that: (1) macroeconomic instability in Egypt and increases in international oil prices promote remittances; (2) GDP growth rate in the host countries and depreciation of domestic currency spur remittances; (3) financial development is inversely related to remittances, implying that remittances and financial development are substitutes; (4) GDP growth in the home country is not significantly associated with remittances.