Remittances and vulnerability in developing countries

Giulia Bettin, Andrea Presbitero and Nikola Spatafora

No 6812, Policy Research Working Paper Series from The World Bank

Abstract: This paper examines how international remittances are affected by structural characteristics, macroeconomic conditions, and adverse shocks in both source and recipient economies. The paper exploits a novel, rich panel data set, covering bilateral remittances from 103 Italian provinces to 87 developing countries over the period 2005-2011. Remittances are negatively correlated with the business cycle in recipient countries and increase especially strongly in response to adverse exogenous shocks, such as natural disasters or large terms-of-trade declines. Financial development in the source economy, which eases access to financial services for migrants and reduces transaction costs, is positively associated with remittances. Conversely, recipient-country financial development is negatively associated with remittances, suggesting that remittances help alleviate credit constraints.

Keywords: Population Policies; Debt Markets; Remittances; Access to Finance; Economic Conditions and Volatility (search for similar items in EconPapers)
Date: 2014-03-01
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (39)

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Related works:
Journal Article: Remittances and Vulnerability in Developing Countries (2017)
Working Paper: Remittances and vulnerability in developing countries (2014)
Working Paper: Remittances and Vulnerability in Developing Countries (2014)
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