The ability to send substantial financial assistance to friends and relatives at home has been a strong incentive for both legal and illegal immigration to the United States. Remittances have also become an important component of global financial markets, and the substantial sums received in some impoverished countries often make important contributions to the local economies.
The sending of part of one’s wages to friends or family back home, known as remittances, is a common practice for many immigrants, especially those from
Immigrants who send remittances typically send a few hundred dollars per month, using both formal and informal financial channels. Popular methods have included deliveries made in person during home visits, regular postal services, and wire-transfer companies such as Western Union and MoneyGram. Immigrants are often reluctant to deal with banks and credit unions to send remittances because of problems with their own immigration status or a lack of required identification documents.
The amounts of money sent in remittances tend to fluctuate with changing immigration policies, dropping during times of immigration restrictions. However, the general trend has been steady growth over the years. Sending remittances has become so popular that it has inspired the development of a sizable international remittance market. At the same time, many poor and developing countries have come to rely on remittances from the United States as key sources of hard currency and development capital, especially in Latin America, the Caribbean, India, and the
The popularity of remittances among U.S. immigrants has had both positive and negative impacts. Remittances provide an incentive to immigration and allow immigrants to maintain close links with family members back home. However, critics have argued that immigrants cost American workers needed jobs and their remittances drain money from the U.S. economy that should be spent within the United States. An additional criticism is that remittances can promote a dependence on outside charity without contributing to local development.
Borjas, George J., and Richard B. Freeman. Immigration and the Work Force: Economic Consequences for the United States and Source Areas. Chicago: University of Chicago Press, 1992. Maimbo, Samuel Munzele, and Dilip Ratha. Remittances: Development Impact and Future Prospects. Washington, D.C.: World Bank, 2005. Özden, Caglar, and Maurice W. Schiff, eds. International Migration, Remittances, and Brain Drain. Washington, D.C.: World Bank, 2005.
Economic consequences of immigration
Latin American immigrants
Pacific Islander immigrants