Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/153122 
Year of Publication: 
2006
Series/Report no.: 
ECB Working Paper No. 688
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
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.
Subjects: 
altruism
balance of payments
migrants' skills
migration
remittances
JEL: 
D13
D64
F22
F24
O15
Document Type: 
Working Paper

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