Remittances, Transaction Costs, and Informality

• Tác giả: Caroline Freund
• Ngôn ngữ: eng
• Ký hiệu phân loại: 026.39 Libraries, archives, information centers devoted to specific subjects and disciplines
• Thông tin xuất bản: 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 303642
• Chủ đề: 1. Geographic Labor Mobility; 2. Immigrant Workers J610; 3. International Investment; 4. International Migration F220; 5. Long-term Capital Movements F210

Tóm tắt

Recorded workers' remittances to developing countries reached 67 billion in 2005, bringing increasing attention to these flows as a potential tool for development. In this paper, we explore the determinants of remittances and their associated transaction costs. We find that recorded remittances depend positively on the stock of migrants and negatively on transfer costs and exchange rate restrictions. In turn, transfer costs are lower when financial systems are more developed and exchange rates less volatile. The negative impact of transactions costs on remittances suggests that migrants either refrain from sending money home or else remit through informal channels when costs are high. We provide evidence from household surveys supportive of a sizeable informal sector.