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Migration, Remittances and Development

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  1. Migration, Remittances and Development Una Osili Ph.D. Associate Professor of Economics Director of Research The Center on Philanthropy at Indiana University

  2. Outline • Background • Lessons from the New Immigrant Survey, African Diaspora Project • U.S. - Nigeria Migration Survey • Challenges and Opportunities • Policy Issues

  3. Motivation • Remittances have outpaced official development assistance, and exceed foreign direct investment (FDI) in many developing countries (World Bank, 2009) • Women account for about half of an estimated 215 million international migrants (United Nations, 2010). • Gender remains an understudied aspect of international remittance flows and philanthropy.

  4. New Immigrant Survey 2003: Fraction of sample sending remittances

  5. Key Findings from New Immigrant Survey • Female headed are more likely to send remittances, holding other variables constant • Migrants also maintain broad economic and social ties with origin families and communities • Beyond remittances, U.S. immigrants have significant human capital, skills and experiences in the origin country

  6. The Case of Nigeria • Nigeria is the only country in sub-Saharan Africa to rank among the top 25 remittance-receiving countries globally • Nigeria accounts for 60 per cent of all the remittance flows to sub Saharan Africa.  • Remittances are now the second largest source of foreign exchange earnings in Nigeria, after oil exports. • A large share of remittances (>50 percent) take place through informal channels

  7. Unpacking remittances: Lessons from the U.S. Nigeria-Migration Survey 3 types of remittances: • Transfers to the Origin Household support living and educational expenses of home families, finance expenses associated with income shocks (illness, job loss, crop failure) • Migrants’ Savings in the Home Country finance migrants’ investments in the home country (include financial assets, housing, land, small businesses) Nearly half of the U.S. migrant sample has initiated housing investments in the community of origin! • Community-based transfers Sent to finance development projects in the community of origin or community needs (schools, health supplies, libraries, hospitals, erosion control, water supply, computer equipment, church buildings)

  8. Insights from US-Nigeria Migration Survey • The 1997 US-Nigeria Migration Survey found that over 90 percent of Nigerian migrants living in the U.S. send remittances to family members regularly and about another 40% send investment-related transfers. • Gender influences the incidence, levels and types of remittances sent.

  9. Additional Findings • Women are more likely to be remitters • Female-headed households in the country of origin are more likely to be recipients of remittances and receive larger amounts. • Female migrants tend to target their remittances toward education, health, youth projects

  10. Key Findings: Housing Investments • Migrants’ income and origin household assets are positively associated with housing investments. • Less-developed villages are less likely to receive housing investments • The policy context matters

  11. Community Transfers • Descriptive evidence that migrants maintain direct economic ties with their communities of origin. • Hometown associations mobilize migrants’ contributions towards the construction of schools, hospitals and roads, and the provision of other amenities (Attah-Poku, 1996; Egboh, 1987; Smock, 1971).

  12. Community Transfers • Hometowns with larger populations are positively associated with both the incidence and the magnitude of community transfers. • Hometowns located in more remote locations are less likely to receive community transfers and receive lower levels of community transfers.

  13. Gender, Remittances and Philanthropy: Challenges and Opportunities • Migration, Brain Gain and Philanthropy • Beyond Remittances: Diaspora Engagement Key concerns • Scale • Leverage • Collaboration • Sustainability

  14. Regulatory and Policy Issues • Creating an enabling environment • Remittance Barriers: -- cost, convenience, competition, confidence and trust • Role of technology -----family transfers • ---investment transfers • ---community transfers ---

  15. Conclusions • Women account for a growing share of the world’s migrants • Gender affects the incidence, amount and types of remittances –and the impact on the origin household • Female migrants can have a significant impact on their communities of origin through their remittance flows.