A gravity model of remittance determinants: evidence from Latin America and the Caribbean

Abstract

This paper constructs a microeconomic model of the motivation for remittances and uses it to explore the macroeconomic determinants. In addition, a new measure of bilateral remittances is used to estimate a gravity model of remittances for 27 Latin American and Caribbean countries and 18 industrialised countries. The results suggest remittances are motivated by a combination of altruism and self-interest, both of which are encapsulated by economic and non-economic variables