EconPapers    
Economics at your fingertips  
 

More distance, more remittance? Remitting behavior, travel cost, and the size of the informal channel

Fabrizio Ferriani () and Giacomo Oddo ()

Economic Notes, 2019, vol. 48, issue 3

Abstract: The rising number of foreign workers in Italy during the last 15 years has led to a conspicuous increase in the amount of remittances sent abroad. In this paper, we examine the determinants of remittance outflows originated in Italy and transferred abroad through registered financial intermediaries. After controlling for a wide set of socioeconomic regressors, we document a strong positive relation between remittances and the cost of travel between Italy and the migrants' respective home countries. We interpret this result as indirect evidence of unrecorded flows, since the relation between remittances and travel cost should be non‐significant unless geographical proximity permits remitters to switch to informal (non‐observable) transmission mechanisms. Moreover, using data on temporal and monetary costs for a subset of bilateral corridors, we also find remittances to be negatively correlated with high transaction costs and low speed of transfer. We rely on this empirical evidence and on a model of migrants' remitting behavior to present new strategies for estimating the size of the informal outflow.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/ecno.12146

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ecnote:v:48:y:2019:i:3:n:e12146

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0391-5026

Access Statistics for this article

More articles in Economic Notes from Banca Monte dei Paschi di Siena SpA
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2023-01-24
Handle: RePEc:bla:ecnote:v:48:y:2019:i:3:n:e12146