1 Introduction

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Remittances—the money immigrants send to family members in their country of origin—have long been part of the immigration process. But with global networks of financial institutions and telecommunications technologies established, the transmission of funds worldwide now takes place at a pace and volume unimaginable by earlier generations. In this context, remittances are central in the global movement of people, information and resources and they are centre stage in immigration and development research.

In spite of this interest, research on the characteristics of remittance senders in Canada remains quite limited, in large part because of the absence of household survey data. More broadly, studies of remittance senders in Canada and elsewhere are often focused on immigrants from only one or two source countries and consequently they do not provide a broad cross-national perspective. This study addresses these gaps by using the Longitudinal Survey of Immigrants to Canada (LSIC) to document the incidence of remitting and the amounts remitted by immigrants from a wide range of countries. Using a common set of concepts and methods, we find that the incidence of remitting by the 2000-to-2001-landing cohort ranges from less than 10% to some 60% across immigrants from different countries, while the average annual amounts remitted range from about $500 to almost $3,000. Turning to the factors that are associated with remitting, the financial and family characteristics are consistently significant among immigrants from all world regions. By contrast, other factors, such as gender and education, are associated with remitting among immigrants from some regions but not others.

1.1 Context

Considerable work is underway both nationally and internationally to measure remittance flows (Haug 2007). Defining remittances as "…the sum of workers remittances, compensation of employees, and migrant transfers" recorded in national balance of payment estimates, the World Bank estimates recorded remittance flows to developing countries at US$167 billion in 2005 (World Bank 2006: 87). This is likely an underestimate because some remittances flowing through formal channels, such as transfers through post offices or exchange bureaus and remittances below a minimum threshold are often not recorded in official estimates. Furthermore, remittances flowing through informal channels, such as those delivered by family or friends, generally go unrecorded. The World Bank estimates that unrecorded remittances could add 50% or more to the total.

Remittances represent an important source of foreign revenue for developing countries. In absolute terms, India (US$21.7 billion), China (US$21.4 billion), and Mexico (US$18.1 billion) top the list of remittance-receiving countries (World Bank 2006). In proportional terms, the importance of remittances to many smaller countries is evident. For example, remittances account for about 20% to 30% of gross domestic product (GDP) in Tonga, Moldova, Lesotho, Haiti, Bosnia-Herzegovina and Jordan, and for about 10% to 19% of GDP in several others, such as Jamaica, El Salvador, the Philippines, the Dominican Republic, Lebanon and Nepal.

The importance of remittances can also be documented relative to national industries. For example, the Inter-American Development Bank (IDB 2004a: 11) reports that remittances to Mexico "…are more than the country's total tourism revenues, more than two thirds of the value of petroleum exports, and about 180% of the country's agricultural exports." More broadly, the World Bank (2006: 88) reports that in 28 countries, remittances are "…larger than the earnings from the most important commodity export." Remittances also exceed overseas development aid and foreign direct investment in many countries.

Recorded estimates of remittance flows to developing countries have shown a marked increase in recent years, rising by 73% from 2001 to 2005. This trend has been evident across a wide range of nations (World Bank 2006). A number of factors are likely at play, including improvements in data collection, a shift in remittances from informal to formal networks and developments within the remittance industry (World Bank 2006, Orozco 2006).

1.2 Objective and rationale

The objective of this paper is to use recently released data from LSIC to examine the remittance activities of immigrants from different countries of origin, and to identify the socioeconomic characteristics associated with such activities.

To date, Canadian household data on remittances have been very limited and only a few studies have been done (for example, see Hernández-Coss 2005; Simmons, Plaza and Piché 2005; Hamza 2006; CIC 2004). This stands in stark contrast to the United States, where the well- developed U.S.-Latin American remittance corridor has been the subject of considerable research over the years. Likewise, research on the remittance activities of immigrants in Australia and New Zealand dates back more than two decades. While a great deal of Canadian research continues to focus on the labour market and income characteristics of recent immigrants,¹ little attention has been paid to their expenditures, of which remittances are just one component. Recent immigrants' preferences and/or obligations to send money to family members abroad may have implications for other aspects of settlement, such as those of housing or employment decisions. While high rates of low income among recent immigrants underscore the financial constraints often faced by new Canadians, such figures do not take into account the fact that household incomes may be used to support family members abroad.

From a macroeconomic perspective, household data on remittance sending contribute to our understanding of international financial flows and they play a role in the development of concepts and measures for systems of national accounts and balance of payments (Haug 2007). Internationally, there is interest on the part of agencies such as the International Monetary Fund, the World Bank and the Inter-American Development Bank (IDB) in the institutional characteristics of bilateral remittance corridors. For example, Hernández-Coss (2005: 2) notes that "…efforts are underway to induce users [remittance senders] to shift from informal to formal systems in order to increase the transparency of remittance flows and enhance their contribution to development in the recipient countries." The Multilateral Investment Fund of the IDB identifies better documentation of the importance of remittances, reduced transaction costs and improved leveraging of the development impact of remittances as key objectives. Information on the entire remittance process, from the 'first mile' when decisions are in the hands of remittance

senders to the 'last mile' when the funds are in the hands of the recipients, is needed to build a complete picture of this complex phenomenon. The broad cross-national perspective of remittance behaviours offered by LSIC is a valuable contribution in this context.

This paper is divided into several sections. In Section 2, a review of the literature is presented using an approach similar to that of Menjivar et al. (1998). The factors potentially associated with remittance behaviours are discussed in terms of demographic characteristics, financial capacity, obligations to family, characteristics of migration, organizational involvement and country of origin. In Section 3, the data source, methodology and variables used in the study are discussed. In Section 4, the results of the analysis are presented: a series of descriptive statistics is first presented, followed by the results of several multivariate models. In Section 5, the main conclusions and implications of our analysis are discussed.

 

¹ Considerable emphasis has been placed on their earnings trajectories after arrival, the economic returns to their foreign credentials and experience, their ability to find employment in their area of specialization, and their incidence of low income. For a review see Picot (2004).