Examining the cyclical pattern of remittance flow, migrants stock, and income of 31 pairs of countries with India

Abstract

This study has examined the cyclical pattern of remittances, migrants’ stock, and income of 31 pairs of countries with India for the period from 2010 to 2016. The main motivation was to examine whether immigration and emigration policies play an influential role to improve welfare between the host and origin country or not in terms of bilateral remittance flows.  As our bilateral remittance and migrant stock data follow a binomial distribution, so we have applied both ordered logit and ordered probit regression models to examine the smoothing hypothesis which was a new addition to the literature. Our result shows that remittance and migrant stocks show a counter-cyclical movement with an income of country origin while it shows a pro-cyclical movement with an income of country destination. The study concludes that financial constraint is a major issue for immigrants’ movement that leads to low remittances flows and should be alleviated. Further, immigration and emigration policies should be determined by looking at the unemployment rate, the magnitude of migration, and the population size of both host and origin countries.