This paper empirically analyses to what extent the level of immigrant
integration determines the channel chosen to send remittances (migrant
money transfers). In recent years, there has been a large push by the
international community to formalize remittances. For this reason, it is
important to take note of the effect immigrant integration can have on
the remittance channel choice. The data used in this study stems from
the Dutch Consumentenbond survey conducted in 2005 which was
specifically designed to focus on migrant remittances. This paper
investigates immigrant integration at the migrant group level as well as
the individual level. For the analysis, a relative measure of immigrant
integration is constructed for six migrants groups, making use of
various variables, which include: educational attainment, language
ability, work force participation, migration history, and others. This
ranking is then used to test the affect of the integration of minority
ethnic groups living in the Netherlands on remittance channel choice. We
hypothesize that the more integrated an ethnic group is in Dutch
society, the more likely they are to remit formally (send money
transfers through formal institutions). There may be a shift from
informal to formal remittances when policies which enhance integration
are put into place. This paper finds that the impact of immigrant
integration is conditional on other factors. If the migrant sending
country has put into place institutional policies (such as banks from
the sending country in the host country) to keep close ties to migrants
via remittances or if there is lack of access in the recipient country
to formal transfers, integration has almost no influence on the
remittance channel decision. For this reason, a combination of policies
would be best able to tackle the task of incentivizing migrants towards
more formal transfers.
Appears in: MGSoG Working Paper Series (discontinued)
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