Remittance is part of the employee‘s wages or salary which is sent to family or friends back home. Remittances not only help the workers' family members, who are often poor, they also help the home countries to strengthen their balance of payments. From the economic perspective, remittances are remuneration to employees from the economy where they work and thus contribute to both GDP (gross domestic product) and GNI (gross national income) of that economy. Research into the issue of remittances reveals that it has some very salient and ubiquitous characteristics that embrace many policy issues. There are studies that link remittances to poverty reduction; sustainable third world development; balance of payment improvements; indigenous knowledge; and, globalism, for example. Ironically, the paradox of remittances is that it is an individual decision that manifests itself globally and impacts nations and global economies. Because of its stability, inelasticity to economic shocks, and dependability, remittances have become a permanent fixture of government‘s financial revenues.
The primary objective of this research is to determine whether foreign nationals make a statistically significant contribution to the level of remittances. Work on remittances infers that the millions of dollars are sent by migrant workers. Although work may be seasonal or temporary, the level of remittances continues to increase despite fluctuations in the size of migrant workers. This researcher utilizes three models to test whether the different categories of: immigrants; naturalizations; and non-immigrant temporary workers send significant amount of remittances.
This work looks at the flow of remittances during 1982 – 2001 from the United States of America to the Caribbean region, The Dominican Republic, Jamaica, Mexico, and Trinidad & Tobago. It was found that the number of 'immigrants admitted,' 'persons naturalized,' 'non-immigrants admitted as temporary workers, exchange visitors, and intracompany transferees,‘ the 'exchange rate,' the 'Hispanic unemployment rate,' and the 'median income of Hispanic families' are responsible for large changes in the flow of remittances. When the results are extrapolated to predict future remittance flows, the number of 'immigrants admitted by region' would produce the maximum remittance flow to Jamaica and Mexico. The number of persons naturalized is important to the remittance for the overall Caribbean region. The non-immigrant temporary worker group is the largest single remittance source. This group may potentially send $12 billion U.S. to The Dominican Republic, and $15 billion U.S. to Trinidad & Tobago.
Keywords: Remittances, Determinants, Latin America, Caribbean, Immigrants