Introduction

The issue of migration and development has become highly relevant in recent years on the global policy agenda. Countries and international organisations increasingly perceive migration as a phenomenon that can positively impact development in both migrant receiving and sending countries, provided that appropriate policies are in place. One of the central issues within the context of the migration and development nexus is the role of migrants’ remittances as a source of capital and possible engine for economic growth in developing countries.

Migrants’ remittances gained in importance on the international agenda because of the dramatic rise in international flows. Between 2001 and 2005 international migrant remittances’ flows increased by 58 per cent, to reach about US$ 232 billion (World Bank 2005a). With about US$ 167 billion, developing countries received the biggest share, while industrial countries in North America and Western Europe are the major sources. However, there is still limited knowledge about the way in which these international transfers affect economic development in the home countries of migrants.

Literature review

Empirical evidence illustrates that the amounts remitted depend on the migrants’ characteristics. Glytsos (1997) highlighted the importance of the immigrants’ return intention in determining remittance behaviour by proving that temporary migrants remit more than permanent ones. Semyonov and Gorodzeisky (2005) report gender differences in Philippine remittance behaviour, with male migrants sending more money than female migrants to households in the Philippines, owing to greater male earnings. DeVoretz and Vadean (2007) show that immigrant households belonging to ethnic groups in which people are more attached to their extended family remit more of their income and over longer periods of their lifetime. Faini (2006) points out that highly skilled migrants remit less than low-skilled because they are more likely to settle permanently and to reunite with their close family in the host country. Lucas (2001), however, argues that highly skilled migrants make a very important contribution to the development of their countries of origin, through remittances, investments and transfer of technology.

Nevertheless, the socio-economic environment and policies in migrant sending and receiving countries might also affect the amount remitted. For example, Vadean (2007) notes that migrants possessing dual citizenship (i.e. of the country of origin and of the host country) are more likely to be remitters and remit higher amounts compared to migrants of only one nationality.