Immigrant integration and remittance channel choice

    Immigrant integration and remittance channel choice
    by Melissa Siegel

    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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