Migration, Remittances and Development

Una Osili Ph.D.Associate Professor of EconomicsDirector of ResearchThe Center on Philanthropy at Indiana University

Outline

•Background•Lessons from the New Immigrant Survey,

African Diaspora Project•U.S. - Nigeria Migration Survey•Challenges and Opportunities•Policy Issues

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.

New Immigrant Survey 2003: Fraction of sample sending remittances

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

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

Unpacking remittances: Lessons from the U.S. Nigeria-Migration

Survey3 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 transfersSent 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)

U.S. Migrants U.S. Migrants &(Migrant Sample) Origin Households

(Matched Sample)Mean Standard Mean Standard

Deviation DeviationVariable

Sent remittance in the past yr 0.93 0.93Received remittance in the past year 0.87

Migrant Sent Transfer to Origin Family 0.85 0.86Migrant Sent Transfer towards Investment 0.35 0.40

Total amount sent in past yr (in U.S. $) 5807.43 10653.92 6018.52 7961.14

Amount Transferred to Origin Family 3018.60 3797.58 3489.72 4317.56Total amount received by Origin Family 2220.25 3970.48

Amount Transferred towards investment 2706.95 8737.84 2400.07 5352.08Other transfers 277.69 1216.65 128.73 467.28Note: For the survey period $1=86nairaUS-Nigeria Migration Survey

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.

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

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

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).

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.

Gender, Remittances and Philanthropy: Challenges and

Opportunities•Migration, Brain Gain and Philanthropy•Beyond Remittances: Diaspora Engagement

Key concerns•Scale•Leverage•Collaboration•Sustainability

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 ---

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.