Remittances and economic growth A case study when remittances are sent from Italy

Abstract

Remittances often represent a direct link between those who have decided to emigrate and the family and friends who have remained in the country of origin. There are several reasons why people may choose to send money from the country of destination to the source country. Some choose to remit because they are motivated by altruistic purposes and thus to help their family left-behind, others because they feel obliged to repay their relatives for the efforts made to send them abroad and to take care of their loved ones during their absence. Finally, migrants may decide to send money to their country of origin only for personal purposes, such as investing in land or businesses in their country of birth. Often, however, there is not only one motivation that explains the choice to remit, but it is in a mix of them that it’s possible to found out the answer to the question "why do foreigners decide to remit?". The aim of this thesis is to determine whether there is a correlation between remittances and economic growth. In this regard, the research question is: do remittances leaving Italy affect the economic growth of the receiving country? In this context, the Italian region from which the money leaves and the nationality of the foreigners may be variables that particularly influence the value of remittances sent abroad. In order to answer the research question, first of all the features of foreigners living in Italy were analyzed, and then a regional analysis based on the presence of foreigners according to nationality was carried out, with the aim of identifying whether there is a link between the nationality of foreigners and the region in which they are most concentrated. Finally, remittances departing from Italy, and thus from Italian regions, were examined, focusing on whether or not they affect the economic growth of the receiving country based on changes in GDP.