Determinants of workers’ remittances: evidence from the European Neighbouring Region

Arbeitspapier

Workers’ remittances have become the second largest source of net financial flows to developing countries. However, the main motives for sending remittances remain controversial. This paper examines the importance of altruistic versus investment motives using a new panel data set of bilateral flows from 21 Western European to 7 EU neighbouring countries. We find that altruism is important for remitting, as the GDP differential between sending and receiving countries is positively correlated with the average remittance per migrant. By contrast, interest rate differentials are insignificant, suggesting a weak investment motive. Finally, migrants’ skills raise remittances, while a large informal economy in the sending country depresses official remittance flows.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 688

Classification and Topics

• Classification: Wirtschaft ; Household Production and Intrahousehold Allocation ; Altruism; Philanthropy; Intergenerational Transfers ; International Migration ; Remittances ; Economic Development: Human Resources; Human Development; Income Distribution; Migration
• Subject: altruism ; balance of payments ; migrants' skills ; migration ; remittances ; Rücküberweisungen ; Altruismus ; Auslandsinvestition ; Zahlungsbilanz ; EU-Staaten ; Osteuropa

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Schiopu, Ioana ; Siegfried, Nikolaus
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/153122
• Last update: 10.03.2025, 11:46 AM CET