MEASURING THE INCOME EFFECTS OF MIGRANT REMITTANCES - A METHODOLOGICAL APPROACH APPLIED TO GREECE

This article attempts a disaggregated sectoral analysis of the income effects of remittances on consumption, production, imports, employment, and capital formation. The impact of remittances on the consumption pattern in localities with heavy migration is also selectively investigated. The analysis concerns itself first with an assessment of the spending behavior and the standard of living of individual remittance recipients and, with the local and aggregate effects of individual spending. Probing below the surface of the first round effects of spending, the purpose of this methodology is to test various often contradictory views and popular convictions as to the pros and cons of the effect remittances have on economic development. The effort is to provide an overall picture of individual and aggregate income effects of remittances, using the case of Greece as an example. The individual pattern of consumption of remittance recipients improves very drastically, as does the local standard of living in areas of heavy migration, as the recipients shift to more urbanized consumption habits. Remittances promote economic growth, employment, and capital formation. -from Author