Are Immigrant Remittance Flows a Source of Capital for Development?
IMF Working Papers, September 1, 2003
Source details
- Canonical URL
- Are Immigrant Remittance Flows a Source of Capital for Development?
Other formats
Bibliographic details
- Authors: Samir Jahjah, Ralph Chami, Connel Fullenkamp
- Published: September 1, 2003
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451859638.001
Summary and research question
- The role of remittances in development and economic growth is not well understood.
- The paper develops a framework that links the motivation for remittances with their effect on economic activity.
- Because remittances take place under asymmetric information and economic uncertainty, the authors identify a significant moral hazard problem.
- The implication from the framework is that remittances have a negative effect on economic growth.
Methods
- The authors develop a theoretical framework linking remittance motivation to economic outcomes.
- Empirical testing uses panel methods on a large sample of countries.
Key findings and results
- The empirical results indicate that remittances do have a negative effect on economic growth.
- The negative effect is interpreted as indicating that the moral hazard problem in remittances is severe.
Subject areas and keywords
- Subjects: Balance of payments; Financial sector policy and analysis; Income; Migration; Moral hazard; National accounts; Outward remittances; Population and demographics; Remittances.
- Keywords: altruism; asymmetric information; economic growth; effects of remittance; Income; interest rate; Middle East; Migration; moral hazard; Outward remittances; private income transfers; remittance arrangement; remittance choice; remittance decision; remittance determination; remittance inflow; remittance literature; remittance transfer; remittance-determination equation; remittances; worker remittance; WP.
Content in this bundle
- Are Immigrant Remittance Flows a Source of Capital for Development? - WP/03/189