Browsing by Subject "Remittances"
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Item Capital flows to Latin American countries: effects of foreign direct investment and remittances on growth and development(2009-05-15) Vacaflores Rivero, Diego EduardoThe significant restructuring of international capital flows to developing countries ? in particular to Latin American countries ? observed in the last quarter century has generated significant research in the area to examine its potential impact on development efforts. The resurgence of foreign direct investment (FDI) and the increasing significance of remittances, both as shares of gross domestic product (GDP), have made these types of capital flows the most analyzed. Despite the large fraction of empirical studies that find a positive and significant relationship between FDI and economic growth, an important fact that has been so far overlooked in the literature is its impact on standards of living in host countries. This dissertation first establishes the strong complementary connection between FDI and economic growth in Latin America, measured by increases in GDP per capita growth rates, to then examine additional channels through which it could affect the welfare of the region. I first show that FDI has a positive effect on central government tax revenues, which is mainly channeled through its effect on taxes on goods and services. I then show that FDI has a positive and significant effect on the employment rates in these host countries, with female employment rate getting the largest impact ? relative to males. Remittances are another capital flow that plays a large and important role in certain economies, exceeding 10% of GDP in some countries. The impact of remittances on the main macroeconomic measures of a small open economy is analyzed in the last section using a stochastic limited participation model with cash in advance constraints and costly adjustment of cash holdings. After verifying that the model responds adequately to standard shocks, a remittances shock is introduced to examine the dynamic response of the representative economy. The results show that a positive remittances shock forces the exchange rate to depreciate and lowers both output and consumption in the period of the shock. The positive shock lowers utility during the shock but raises it from the following period onwards, improving discounted utility after 10 years when remittances are 10% of GDP and there are no adjustment costs.Item Macroeconomics, politics, and policy: The determinants of capital flows to Latin America(2007-08) Huggins, Caitlin Elizabeth; Biglaiser, Glen; Thames, Frank; Patterson, DennisSince the “lost decade” of the 1980’s Latin America has attracted several forms of capital from abroad. Extensive studies about the effects of capital have found mixed results about their effects, but that these emerging markets are constantly seeking out foreign monies. Despite unresolved debates over these effects, policy makers desire to understand the determinants of capital inflows—specifically foreign direct investment (FDI), portfolio investment (PI), and remittances. Although determinants of FDI have been extensively studied, portfolio investment and remittances, which make up a combined three-fourths of capital inflows for many of these nations, have been mostly ignored. In this study, I investigate the different factors and dynamics that determine these three different forms of capital inflow. I argue that the factors (macroeconomic, political, and domestic) that help determine each of these types of capital inflows are different across inflow type. I find that PI remains the most unpredictable form of capital to the region, but that remittances and FDI demonstrate important similarities that policy makers should consider. My findings about remittances also have substantial implications for future research of migrants’ decision to remit as well as a states’ ability to stimulate these flows with implications for capital control policy.Item The political economy of remittances : emigration, social insurance provision, and political behavior in Mexico(2010-08) Germano, Roy; Weyland, Kurt Gerhard; Freeman, Gary P.; Greene, Kenneth F.; Sassen, Saskia; Galbraith, James K.Why do international migrants send money home? What are the implications of these monetary flows for developing countries? Long debated by economists and sociologists, these questions have received very little attention in the political science literature. This dissertation argues, however, that remittances—money sent home or “remitted” by international migrants—have significant implications for the study of politics. My main contention is that international migrants assume a more significant welfare burden when their home government’s commitment to social insurance provision is in decline. Remittances, in other words, flow to compensate non-emigrating citizens for state retrenchment and the absence of a robust welfare state. I argue that this “transnational safety net” makes remittance recipients (RRs) less vulnerable to economic instability than neighbors who do not receive this money. All else equal, RRs should be more contented with their economic circumstances and have fewer economic grievances with which to politicize. The income-stabilizing and insurance effect of remittances, then, should reduce public pressure on the state, leaving RRs less motivated to mobilize against and punish incumbents for a poor economy when public safety nets are weak. Evidence comes from an original survey of 768 Mexican households, field interviews, and time-series data published by the Bank of Mexico. Statistical tests reveal that Mexicans abroad remit more to families that do not receive social benefits and send roughly $2.5 million more home for every $10 million reduction in spending on social programs by the Mexican government. Analyses furthermore reveal that despite being very poor on average, RRs tend to enjoy higher levels of income stability, are less likely to identify an economic matter as “the most important problem facing Mexico,” and make more positive and optimistic assessments of the national economy and their own financial circumstances. In the 2006 Mexican presidential election, I find that RRs were up to 15 percent more likely to stay home on election day at the expense of the primary opposition party and significantly less likely to punish the incumbent party with a vote for either of the major opposition parties if they did vote.Item Remittances: determinants, motivations and effects(2009-05-15) Naufal, Georges SamiThis dissertation examines the determinants, motivations and effects of remittances. In that last two decades remittances have gained interest due to their large size. For several developing countries remittances constitute a large portion of their gross domestic product and sometimes exceed foreign direct investment. In the first essay, I use a unique data set from Nicaragua to asses the behavior of persons who send money back home. I estimate a heteroskedastic Tobit with a known form of variance to estimate the correlation of the remitting decisions of migrants. Working, residing in a developed country and belonging to the nuclear family positively affect remittances. The labor status and the level of education of the head of the household both affect remittances. The decision to participate in the remitting process appears to be positively related across migrants within the same receiving household. The second essay presents a simple theoretical model of migrants' remitting behavior. I consider two general motivations for remitting: altruism and self-interest. From the same data set used in the first chapter, I estimate a heteroskedastic Tobit and a sample selection equation to empirically test the findings of the theoretical model. Evidence suggests that migrants from Nicaragua remit for altruistic reasons. Moreover some gender heterogeneity exists in the remitting behavior. In the last essay, I study the impact of remittances on a small open economy using a stochastic limited participation model with cash in advance constraints and costly adjustment of cash holdings. I examine the impact of remittances on the steady state of the economy and on the dynamic response of variables to money shocks, output shocks, and shocks to remittance flows. I also examine the impact on dynamic responses to shocks of alternative specifications regarding the initial impact of a monetary injection or a remittances shock on the economy. I find that a positive remittances shock forces the exchange rate to depreciate and lowers both output and consumption in the period of the shock, irrespective of adjustment costs on money balances. Also, the positive remittance shock lowers utility during the period of the shock but improves it thereafter.Item A study of remittances from Central American and Mexican labor migrants in the United States : a family-level approach to economic well-being(2013-08) Held, Mary Lehman; Padilla, Yolanda C.Central America and Mexico are characterized by high levels of poverty. In response, labor migration has emerged as a major strategy among families through the sending of earnings (or remittances) to households back home. Large amounts of remittances are sent, with over $13 billion to Central America and more than $23 billion to Mexico in 2011. While remittances to Mexico have been studied extensively, much less is known about the factors associated with remittances to Central America. This mixed methods study examined remittance sending and use patterns of Mexican and Central American labor migrants to the United States. Data on remittance behaviors were drawn from two major surveys, the Latin American Migration Project and Mexican Migration Project. Quantitative analyses were conducted using multiple regression to examine family-level predictors for the decision to engage in labor migration, whether remittances were sent, amount of remittances sent, and the purposes for remitting. Qualitative analysis involved focus group interviews of Mexican and Central American migrants in the United States who currently remit to their families back home. These interviews helped to discern the meaning of remittances for migrants and their families. The quantitative results suggest that top purposes for remitting include food and daily maintenance, education, health, and housing. Additionally, remittance sending patterns differed by region of origin. Mexican migrants were more likely to send remittances and to remit larger amounts. Additionally, individuals from Mexico had increased odds of sending funds for housing expenditures while Central Americans had greater odds of remitting for education and consumer goods. According to respondents who participated in the qualitative study, increasing costs of food, health, and education coupled with limited employment options contribute to a reliance on labor migration in both regions. For many, remittances have emerged as an essential source of income for economic wellbeing and even survival. A key implication for social work of this study on the larger population patterns on remittances is that at the family level, migrants carry a dual responsibility to settle into a new country while also maintaining the economic wellbeing of family left behind.