Economic Resources, Financial Aid and Remittances

18 Pages Posted: 11 Jun 2018

See all articles by Simon Boulanger Martel

Simon Boulanger Martel

University of Montreal

Lisa Pelling

Arena Idé

Eskil Wadensjo

Stockholm University - Swedish Institute for Social Research (SOFI); IZA Institute of Labor Economics; Stockholm University Linnaeus Center for Integration Studies (SULCIS)

Abstract

According to the World Bank, in 2017, an estimated 450 billion US dollars in remittances were sent to Low and Middle Income Countries. This means that the sum of remittances is more than three times larger than the sum of the world's total official aid to the same countries. The practice of sending remittances can be seen as one specific thing that migrants do as part of sustaining ties with their countries of origin. Remittances can be personal gifts, but are often sent in order to support family members and friends in their country of origin living under more difficult economic conditions. Remittances may also be a form of investment or repayments of loans. In this study we use data from the latest Swedish level of living survey LNU-UFB to study the factors influencing the propensity to remit.Using probit estimations, we find that the economic situation of the migrant, demographic variables and the migrants' ties to the home country are important. The propensity to remit also varies by country of origin. With an increasing number of migrants, the propensity to remit will have growing policy implications. It will have implications for Sweden as a donor country, raising issues of complementarity between remittances and official development aid. Migrants' propensity to remit will also be increasingly relevant for Sweden's integration policies, as the motives to remit might shape immigrants' decisions and priorities while settling in Sweden.

Keywords: migration, remittances, foreign born

JEL Classification: F22, F24, J15

Suggested Citation

Boulanger Martel, Simon and Pelling, Lisa and Wadensjo, Eskil, Economic Resources, Financial Aid and Remittances. IZA Discussion Paper No. 11552, Available at SSRN: https://ssrn.com/abstract=3193306 or http://dx.doi.org/10.2139/ssrn.3193306

Simon Boulanger Martel (Contact Author)

University of Montreal

C.P. 6128 succursale Centre-ville
Montreal, H3C 3J7
Canada

Lisa Pelling

Arena Idé ( email )

Barnhusgatan 4
Stockholm, 11123
Sweden

Eskil Wadensjo

Stockholm University - Swedish Institute for Social Research (SOFI) ( email )

Universitetsvägen 10F
SE-106 91 Stockholm
Sweden

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Stockholm University Linnaeus Center for Integration Studies (SULCIS) ( email )

SE-106 91 Stockholm
Stockholm
Sweden

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