The determinants of remittances : impact of migration concentration

Abstract

In today's globalized world, movements of people and transfer of funds have become widespread. Remittances are playing a greater role in improving the livelihoods of people around the world. The literature on remittances is divided in two major parts: the part dealing with the impact of remittances on economic development and the part dealing with the determinants of remittances. In this project, we build on the second approach and attempt to examine the impact of the concentration of migrants or their diversification across countries of destination on the flows of remittances they send back home. We use panel data between 1990 and 2015 and find that higher migration concentration implies higher remittance flows. One interpretation could be that there is an imitation effect. Thus, when migrants leave their country of origin, they imitate those who preceded them to the same countries and like them, send back remittances to the home country.