This lesson introduces remittances and explains their scale and direction around the world. Understanding these flows helps show how migration connects households and national economies.
A remittance is a non-commercial transfer of money from someone living or working abroad to people or a household in their home country or homeland. Senders may be migrant workers, members of a diaspora community, or citizens with family ties abroad. The World Bank describes workers' remittances as earnings that a migrant worker sends to family members in the country of origin.
All flashcards
Remittance
A personal, non-commercial transfer of money across borders, often sent by a migrant to people in their home country.
Tempered altruism and enlightened selfishness
A combination of caring for relatives and recognizing reciprocal obligations or personal benefits.
Counter-cyclical remittance
A transfer flow that may remain stable or grow in importance when the recipient country's economy faces hardship.
Money-transfer operator (MTO)
A provider that facilitates transfers, often allowing recipients to collect cash through its locations or agents.
Exchange-rate margin
The difference between the exchange rate a provider offers and a reference market rate, which can add to transfer costs.
Quiz questions
What does the phrase “tempered altruism and enlightened selfishness” describe as a motivation for sending remittances?Answer: A combination of concern for relatives and recognition of reciprocal obligations or benefits.
What is the key difference between SWIFT and a walk-in cash-pickup service?Answer: SWIFT supports financial institutions' communications, while cash-pickup services deliver funds to recipients.
When comparing remittance services, what should a sender examine to understand how much the recipient will get?Answer: The total delivered amount after fees and exchange-rate effects.
What is the general relationship between remittances and GDP growth across countries?Answer: There is no conclusive universal relationship; effects vary by context.
Why might anti-money-laundering and counter-terrorist-financing requirements increase remittance costs?Answer: Compliance expenses for transfer companies may be passed on to senders.
Based on the Wikipedia article Remittance, licensed CC BY-SA 4.0. Adapted into a summary, flashcards and quizzes.