## Are Immigrant Remittance Flows a Source of Capital for Development?

_IMF Working Papers, September 1, 2003_

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## 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

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### 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.

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/are-immigrant-remittance-flows-a-source-of-capital-for-development-16801_