Remittances—private income transfers from migrants to family members in their home country—are good news for the families that receive them. Often sent a few hundred dollars at a time, the remittances increase disposable income and are generally spent on consumption—of food, clothing, medicine, shelter, and electronic equipment. They have been growing for decades (see Chart 1). Remittances help lift huge numbers of people out of poverty by enabling them to consume more than they could otherwise (Abdih, Barajas, and others, 2012). They also tend to help the recipients maintain a higher level of consumption during economic adversity (Chami, Hakura, and Montiel, 2012). Recent studies report that these flows allow households to work less, take on risky projects they would avoid if they did not receive this additional source of income, or invest in the education and health care of the household. In other words, remittances are a boon for households.
See full Article: http://www.imf.org/external/pubs/ft/fandd/2013/09/Chami.htm
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