Contribution of International Migration to Remittance:
During exigent situations such as disasters & emergencies, remittances are playing a pivotal role in providing aid to people suffering losses due to war or natural calamities (Carrington, 1999). The London-based Overseas Development Institute (ODI) recognizes remittance as one of the better ways of help during emergencies. Owing to the fact that this is an intensely intricate & so large in terms of numbers, many researchers feel that the manner in which people spend their remittance will have an important developmental impact on their local economies. However, the manner in which people spend remittances is disputable. Some studies reveal that many people spend it on consumption goods such as food, consumer durables & other consumer goods, which while raising their standard of living, will have little positive effect on the local economy. Then there are others who invest remittances in education, buying house, businesses etc; that raise the quality & quantity of human & physical capital. These investments tend to have positive impact on the general health of the economy. Generally speaking, it would be safe to assume that the ‘’remittance economy’’ is labour intensive & labour driven (Semyonov, 2005, p 45). But, the net effect of remittance on labour market & supply of labour is largely obscure. Remittances may slightly reduce unemployment without having an out and out effect on the state of unemployment. Remittances can also substitute income where the recipients will no longer seek work as they are already getting sufficient money & this might make them lazy & averse to hard work. This could create a ‘’culture of idleness.’’ Generally speaking, a large number of remittances are coming from labour market leading to a drop in unemployment rate. Remittances also bring with them a risk in terms of price rise & inflationary concerns. Put simply, this result in a massive inflow of capital into the economy, thereby directly impacting money supply (Stark, 1982, 191-196). This could shoot prices up & cause inflation. Then there are also political detriments that could offset the plus points of remittances.