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The Propensity to Remit: Macro and Micro Factors Driving Remittances to Central America and the Caribbean
Author:
Hussein Bidawi
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,
Paola Aliperti F. Domingues
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,
Chiara Fratto
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, and
Ms. Nicole Laframboise
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Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 203
Language:
English
Publication Date:
30 Sep 2022
DOI:
https://doi.org/10.5089/9798400221873.001
ISBN:
9798400221873
ISSN:
1018-5941
Pages:
35
Keywords:
Migrant remittances; covid-19 pandemic; global financial crisis; elasticities.; remittance flow; micro data; labor market condition; IMF working papers; remittances to Central America and the Caribbean; migrant remittance; Remittances; Migration; Income; Labor markets; Central America; Caribbean; Global
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In contrast to expectations, remittances to Central America and the Caribbean (CAC) surprised positively during 2020 and 2021. This study revisits the key macro indicators driving remittances, looks at the heterogeneous impacts of the global financial crisis (GFC) and COVID shocks, then uses micro data from the U.S. Current Population Census to examine individual features of immigrant households and how this might affect the “propensity to remit”. The paper finds that remittance flows are responsive to both sending and receiving country economic conditions and that labor market conditions are particularly important determinants of remittance flows, explaining the unexpected jump in remittance flows in 2020-2021 and providing stronger predictive power when combined with income variables. Analysis of the micro data reinforces these findings, reflecting the existence of a family resource sharing model at play.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund