Remittances and Vulnerability in Developing Countries

Bettin, Giulia; Presbitero, Andrea F.; Spatafora, Nikola L.

doi:10.1093/wber/lhv053

Publication: Remittances and Vulnerability in Developing Countries

cbn

Files in English

English PDF (510.52 KB)

506 downloads

Date

2017-02

ISSN

1564-698X

Published

2017-02

Author(s)

Bettin, Giulia

Presbitero, Andrea F.

Spatafora, Nikola L.

Abstract

This paper examines how international remittances are affected by structural characteristics, macroeconomic conditions, and adverse shocks in recipient economies. We exploit a novel, rich panel data set, covering bilateral remittances from 103 Italian provinces to seventy-nine developing countries over the period 2005–2011. We find that remittances are negatively correlated with the business cycle in recipient countries and in particular increase in response to adverse exogenous shocks, such as large terms-of-trade declines. This effect is stronger where the migrant communities have a larger share of newly arrived migrants. Finally, we show that recipient-country financial development is negatively associated with remittances, suggesting that remittances help alleviate credit constraints.

Citation

“Bettin, Giulia; Presbitero, Andrea F.; Spatafora, Nikola L.. 2017. Remittances and Vulnerability in Developing Countries. World Bank Economic Review. © Published by Oxford University Press on behalf of the World Bank. http://hdl.handle.net/10986/30126 License: CC BY-NC-ND 3.0 IGO.”