International remittances; International migration; Gravity Models.

F24, F22, F63

This paper investigates the macroeconomic determinants of global bilateral remittances flows. Unlike existing studies, which have been often hampered by the lack of comprehensive and large-enough datasets, we use data originally covering 214 World countries over the 2010-2017 period. We employ a gravity-model approach to explore the role payed by dyadic and country-specific covariates in explaining remittances. We find that remittance flows are robustly and strongly impacted by size effects (i.e., number of migrants in the host country and population at home); transaction costs; common social, political and cultural ties; output growth rate and financial development at home. We also document the existence of a robust non-linear relationship between per-capita income at home and remittance flows, both in the aggregate and across income group. Our results suggest that altruistic and self-interested motives non-trivially interact and change across both host/home income groups and income level at home.