UNFPA/UNECE/NIDI Training programme on international migration, Geneva, 24-28/01/2005 Receipt of Remittances and their effect on emigration intentions in Egypt, Morocco and Turkey George Groenewold (NIDI) References: Bilsborrow, R.E., Hugo, G., Oberai, A.S., Zlotnik, H International Migration Statistics. International Labour Office. Geneva. Chami, R., Fullekamp, C., Jahjah, S Are Immigrant Remittances Flows a Source of Capital for Development. International Monetary Fund Working Paper, WP.03/189. Groenewold, G. and Fokkema, T. (2002). Receipt of remittances and its effect on emigration intentions in Egypt, Morocco and Turkey. NiDi research report. The Hague. World Bank, Global Development Finance Report 2003, Washington.

Definition, Relevance, Measurement Three streams of money flowing into countries constitute total remittance: 1. Worker remittances (value of monetary transfers sent home from workers abroad who are staying abroad (or intend to do so) for more than one year 2.Compensation of employees (value of gross earnings of those residing abroad for less than one year) 3.Migrant transfers (total net worth of migrants who move from one country to another, thus including value of all his/her possessions, including stocks) In 2001, total remittances (US$ 100 billion) rank second only to FDI (US$ 145 billion) in developing economies. Remittances doubles the amount of development-aid In 2001, 60% of remittances flows to 10 countries only (Ranking: India, Mexico, Philippines, Morocco, Egypt, Turkey, Lebanon, Bangladesh, Jordan, Dominican Republic). About 80 % of total remittances are generated in Middle Eastern oil producing countries, U.S.A. and Western Europe. Data sources: Balance of Payment Statistics, Migration Surveys, Remittances Surveys Unknown part of remittances flow through ‘unofficial channels’.

World Population, International Migrants Stocks and Refugees and Worker Remittances (Source: UN Population Division, 2002)

Justification Other research findings: -Remittances received: Egypt US$ 425, Morocco US$ 1350, Turkey US$ 400 -Remittances mainly used to finance daily cost of living (e.g. food, clothing) -Thus, remittances important to alleviate poverty. However, not all households received remittances: Egypt 56%, Morocco 77%, Turkey 58% New questions raised: RQ 1. Why do some household receive remittances while others don’t? - differences in financial dependency or financial status of households? - differences in feelings of commitment or economic status of emigrants? RQ 2. Given the importance of remittances, does receipt of remittances affect emigration intentions of household members who stayed behind?

Data NIDI/Eurostat study on international migration from countries in the Mediterranean region and Africa to countries of the European Union covering migrant-sending and non-migrant households (n=1500 to 2000 households) Focus: migrant-sending households, members who stayed behind (i.e. potential emigrants), and members who emigrated (i.e. emigrants) Method and analysis strategy Logistic regression RQ 1 Dependent: Household received remittances in past 12 months (yes/no) Independents: Households and emigrant characteristics RQ 2 Dependent: Potential emigrant intends to emigrate (yes/no) Independents: Household received remittances (=RQ 1. dependent) +Households and emigrant characteristics (=RQ 1. indep.) +Potential emigrant characteristics

RQ1. Household receives remittances (yes/no) RQ2. Potential emigrant intends to emigrate (yes/no)

Findings RQ 1. Why do some household receive remittances while others don’t? Both household and emigrant characteristics are important factors in explaining receipt of remittances (R 2 = ±21 to 29%). However, emigrant characteristics are about twice as important. Economic status of emigrants most important. In particular, likelihood that households in origin countries receives remittances is four times higher if emigrants have a paid job Commitment of emigrants. Likelihood of receiving remittances is higher if emigrants are male or married (with spouse in migrant-sending household). Moreover, only after more than 20 years abroad the likelihood that emigrants remit money declines. Financial dependency. Likelihood of receiving remittances is highest if households in origin country are headed by young married women. Financial status of household. Poorer households in origin countries are more likely to receive remittances but amounts received is lower than amounts received in richer households

RQ 2. Does receipt of remittances affect emigration intentions of household members who stayed behind? Effect of receipt of remittances on emigration intentions is positive and strong, in particular in Morocco and Turkey (see table, next slide). remittances may be interpreted as messages of financial success of emigrants, worth following. Emigrants as ‘role-models’ for potential emigrants In spite of variation between countries, household, emigrant and potential emigrant characteristics are important in the explanation of emigration intentions (R 2 =±25 to 40%) Most important are characteristics of potential emigrant (age, sex, education), least important are characteristics of emigrants

Percentage of persons with emigration intentions in remittances-receiving households compared to such persons in non-receiving households

Final notes: Main differences between potential emigrant with highest emigration intentions in these three countries: Egypt: male, higher educated, with paid job, from financially better-off household Morocco: male, irrespective of education level, unemployed, financially worse-off households Turkey: young persons, male or female, from financially worse-off household, rural area Limitation of findings: migration intention can be used as proxy to predict behaviour but cannot be taken as substitute for actual behaviour Emigrants generate and transfer large amounts of money to countries of origin. National and international organisations should examine the macro and micro level impact of emigration in sending countries, especially the role of remittances. Moreover, they should explore to what extent migrants and migrant oganisations could play a role in development strategies in migrant-sending countries