An Empirical Study of Remittances and Growth in the Developing World

At the microeconomic level, development is about analyzing the lives of the poor. How do citizens in the developing world live? How do they survive? While these important questions can be answered and studied in many ways, a common theme is surely about how they make a living. How much income do lower income countries have? Where do they get it from? Most importantly, how do they use it? This research paper concerns itself with the issue of how the less privileged parts of society procure the funds necessary to survive on a daily basis. Although wage labor, microfinancing, and government transfers undoubtedly play an important role, this paper will take up the issue of remittances and the role they play in developing countries. Remittances are the financial funds emigrants transfer back to their native countries. In other words, individuals who migrate to other countries often work abroad at higher wages and send a share of their wages back home to family members, friends, or business associates