Remittances, Costs and Catastrophes

Abstract

The paper attempts to better understand the mechanisms underlying the costs of remittances. It does so using a multi-country analysis over the 2010s. More specifically, it tries to highlight whether and how the operators on the market adjust to a shock in the demand for remittances. To address endogeneity as well as severe measurement errors, I propose to use the climatic disasters that occurred in the country receiving remittances as an instrument. It appears that, overall, a demand shock on the market of remittances does push up costs up to a delay of a quarter up to a year. Reassuringly, the catastrophe contemporaneously impacts the remittances and so to a large extent, which suggests that further use of this instrument can be achieved in future research.

Rémi Viné

Lecturer, Faculty Lead, and Consultant

My research relates to migration topics (choice of mobility, impact of remittances on the left behind, the costs of transferring money, etc.), and to cross-border capital (FDI and remittances).