Understanding cross-regional variation in the effect of remittances on development outcomes
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Date
2017-05
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The Ohio State University
Abstract
It is well-established in the literature that money being sent home by family members and relatives living away from home, i.e. remittances, can help combat poverty and contribute to economic development across the developing world. There is also consensus that remittances to households in low-income countries are growing rapidly and have even outpaced official aid. However, there is still much to be said about why remittances play a larger role in development for certain countries or regions than others. This project explores why there appears to be large cross-regional variation in the impacts of remittances on development outcomes. I begin by providing a comprehensive review of the existing literature to better understand the motivating factors behind remittances. I continue with a discussion of how characteristics of specific countries and regions influence these motivating factors and contribute to any observed variation in the development outcomes of remittances. From this discussion, I identify key factors affecting the apparent variation in distribution and development impacts of remittances across developing countries. Finally, I present recommendations for future research and development policy implications of my analysis.
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Keywords
remittances, development, risk, transaction costs