Essays on the impact of remittances on the recipient countries

This thesis contains three essays which aim to contribute to the better understanding of the relevance of migration in the origin country with a special focus on remittances, the most consistent outcome of migration. The first essay analyses the impact of remittances on household expenditure behaviour; the second examines the role of remittances and migration on the occupational choice of the household members left behind; and the third essay investigates the remittances behaviour of return migrants during their period abroad. The three different empirical analyses give us some indication of the role of migration and remittances in the process of development and show us that the context of analysis influences substantially how migration and remittances affect the outcomes of interest. In particular, the first chapter, using data from Senegal and employing propensity score matching as well as Working-Leser model, investigates separately the effects of domestic and international remittances on several consumed and investment goods. The results show that in the decision on how to allocate expenditure, remittances are treated just like any other source of income. Aside from being used for covering daily needs, the analysis does not support any hypothesis of “dependency” effect of remittances on those left behind. The second chapter uses data from Tajikistan and using control function approach shows that remittances make an important contribution in generating employment opportunities for those remaining in the country. Men left behind have preferences for self-employed activities. This is likely to have a positive impact on the growth and development in Tajikistan and the results obtained are likely to have policy implications for other developing countries as well. Finally, in the third chapter special attention is given to the remittance behaviour of return migrants during their migration experience. Returnees can have an important impact on growth and development on their origin countries. The essay analyses the decision and the amount remitted by those who returned to their countries of origin. Using a survey data of return migrants collected in Algeria, Morocco and Tunisia, the empirical analysis suggests that remittance behaviour depends on a combination of different individual characteristics as well as duration of the migration experience and form of migration. The survey allows for identifying two types of returnees - decided or compelled - and the type of return can help fully understand the determinants of monetary transfers to the home country during the period spent abroad. Varying degrees of willingness to return as well as the capacity to mobilize resources to the origin countries are key elements in understanding the potential contribution of return migrants to the economic development of sending countries.