4 Results

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4.1 Descriptive results

A significant minority of immigrants from the 2000-to-2001 landing cohort remitted funds to family or friends abroad during their first four years in Canada. During the 6- to 24-month period after landing, some 23% of immigrants remitted and during the 25- to 48-month period after landing, 29% did so (Table 1). Readers are reminded that these two references periods are not of equal length; they are of 18 and 24 months, respectively). Combined information from the 1st and 2nd waves of the Longitudinal Survey of Immigrants to Canada (LSIC) indicates that 28% of immigrants remitted during the first 24 months after landing, almost the same proportion that did so during the subsequent 24-month period. Finally, some 41% of LSIC respondents remitted funds at least once during their first 48 months in Canada.

Among immigrants who remitted, the average amount sent during the first reference period— from 6 to 24 months after landing—was $2,500, while the average amount sent by remitters during the second reference period—from 25 to 48 months after landing—was $2,900.¹³ These averages correspond to reference periods of different duration. Assuming that the total amount sent was evenly distributed over the reference period, annual remittances during the third and fourth years in Canada were $1,450. This is comparable with the estimates reported by Simmons, Plaza and Piché (2005), who find that Haitian and Jamaican immigrants who remitted sent approximately $1,000 to $1,400 per year.

The extent to which remittance behaviours vary between immigrants from different regions of birth is clearly evident in Table 1. Over half of LSIC respondents from Southeast Asia and the Caribbean and Guyana sent remittances home 25 to 48 months after landing, while this was the case for about 40% of those from sub-Saharan Africa and Eastern Europe. About one quarter of the respondents from South Asia and Central and South America sent remittances home during this period, while about one fifth of those from East Asia and from West Asia, the Middle East and North Africa did so.

Among immigrants who remitted from 25 to 48 months after landing, the average amount sent was $2,900, but again, inter-regional differences are evident: immigrants from East Asia who remitted sent, on average, $3,900 over the 24-month reference period; while immigrants from the Caribbean and Guyana sent, on average, less than half that amount ($1,600).

Among LSIC respondents, the incidence of remitting is highest among those from countries with lower gross domestic product (GDP) per capita. Over the period from 25 to 48 months after landing, some 35% to 37% of immigrants from countries with GDP per capita under $4,000 remitted, compared with only 11% of immigrants from countries with GDP per capita of $15,000 or more. One interpretation is that the family members of immigrants from poorer countries are in greater need of financial support than those family members of immigrants from more affluent countries and, hence, the former are more likely to remit. That being said, the relationship between GDP per capita and the incidence of remitting is fairly flat between these extremes, ranging from about 25% to 30%. Conditional on remitting, a consistent relationship between GDP per capita and average amounts remitted is not evident in the descriptive statistics shown in Table 1.

Turning to comparisons across countries of birth, variability in remittance behaviours is particularly striking. As shown in Figure 1, some 60% of immigrants from the Philippines and Haiti remitted two to four years after landing,¹⁴ while about 40% to 50% of immigrants from Jamaica, Nigeria, Romania, Guyana and the Ukraine did so. Quite clearly, remittances are sent by many new immigrants from a diverse set of world regions. France, the United Kingdom and South Korea— three industrialized countries—are at the bottom of the distribution shown in Figure 1.

Turning to the average amounts of money sent abroad, remitters from 11 of the 24 countries shown in Figure 2 sent from $1,700 to $2,200, and remitters from another 7 countries sent from $2,700 to $3,700. While less than 20% of immigrants from the United States sent remittances home, the average amount sent by these individuals was quite high relative to that of immigrants from other countries, at just under $6,000. Readers should note, however, that the confidence intervals around many of the estimates are quite large.

In terms of the admission categories through which immigrants are admitted to Canada, about 30% of immigrants in all three categories remitted from 25 to 48 months after landing (Table 2). However, among the individuals who did remit, economic immigrants sent somewhat larger amounts than did refugees (at $3,000 and $1,900, respectively).

Measures of central tendencies, such as averages, tell us little about the range of remittance values. As shown in Table 2, some 26% of the immigrants who remitted during the period from 25 to 48 months after landing sent less than $500. This was the case for 21% of the economic immigrants compared with 45% of refugees. About one half of immigrants in all categories sent from $500 to $2,500. At the high end of the distribution, some 12% of the economic immigrants who remitted sent $5,000 or more, compared with 5% of the refugees.

An important issue is the extent to which remittance activities impose financial hardships on newly arrived immigrants. Several studies have documented the relatively high and rising rates of low income among recent immigrants (Heisz and McLeod 2004; Picot, Hou and Coulombe 2007). While measures of low income take into account the number of family members co- residing together, they do not take into account the sharing of income with family members residing outside of the household, either in Canada or abroad. This applies to all families, regardless of immigration status. However, given the relatively high rates of low income among recent immigrants and the fact that almost one third of them send money abroad, their financial resources may be stretched further than income figures alone would suggest.

A cautious approach is warranted when addressing this issue. As noted above, because remittance behaviour is measured using individuals rather than families or households as the unit of analysis, estimates of amounts sent abroad are likely to be conservative. Furthermore, remittances as a share of income can be computed using total personal income or total economic family income as the denominator. Total personal income yields a higher percentage, but does not take into account any sharing of financial resources among family members. Total family income yields a lower percentage, but mixes units of analysis (personal remittances and family income). Results from both approaches are presented in Table 3 and represent conservative estimates of the lower and upper bounds of remittances as a share of income. During the second year in Canada, remittances accounted for 7.5% of the total personal income of remitters and for 3.4% of their total family income, on an average annualized basis. Two years later, remittances accounted for 5.9% and 2.9% of the total personal and total family incomes of remitters.¹⁵

Considering all immigrants in our sample, regardless of whether or not they remitted, remittances accounted for 3.7% and 3.4% of total aggregate personal income and for 1.6% and 1.3% of total aggregate family income, two and four years after arrival. From this perspective, remittances account for a fairly small share of the total aggregate income of newly arrived immigrants.

Nonetheless, remittances may still represent a considerable expenditure for some families. Take refugees, for example. The average family income of refugees who remitted during their fourth year in Canada was $36,100. As a point of comparison, the 2004 before-tax low-income cutoff (LICO) was just over $31,000 for a three-person family and just under $38,000 for a four-person family residing in a large urban centre. The LICO is an income threshold below which a family will likely devote a larger share of its income on the necessities of food, shelter and clothing than the average family (Statistics Canada 2006). For those refugees who remitted, an average of almost $1,000 was expended from a fairly modest family income.

4.2 Multivariate results, pooled model

Descriptive statistics certainly testify to the magnitude of cross-national differences in remittance behaviours. These differences partly reflect the different characteristics and experiences of individuals from different countries of origin, and it is to these that we now turn. We begin by presenting results from a logistic regression and ordinary least squares regression based on our pooled sample. The compositional characteristics of immigrants in the pooled sample are shown in Table 5.

4.2.1 Demographic characteristics

In considering demographic characteristics, there is a modest correlation between sex and remittance behaviours (Table 4), with predicted probabilities of remitting—after taking into account other observed characteristics—of 26% for men and 23% for women. Among those who remit, the amount sent by women is approximately 12% less than the amount sent by men. Age is also important, as the predicted probability of remitting is highest among immigrants aged from 25 to 44—at about 30%—and lower among those in younger and older age groups—at less than 20%. Conditional on remitting, individuals aged from 25 to 34 send larger amounts than those under the age of 25 or aged 55 or older.

4.2.2 Financial capacity to remit

Consistent with the literature, there are strong correlations between remittance behaviours and financial capacity. For example, the predicted probability of remitting rises monotonically across family income categories, from 10% among immigrants in families with incomes under $10,000 to 36% among those in families with incomes of $70,000 or more. Conditional upon remitting, the amounts sent abroad also increase monotonically across income categories. The amount sent abroad by remitters in families with incomes of $70,000 or more is approximately 45% higher than the amount sent by remitters in families with incomes of $25,000 to $44,999.

Considering savings abroad, immigrants who have $5,000 or more in savings outside of Canada are significantly less likely to remit (at about 20%) than immigrants who have no savings abroad (at 26%). One interpretation is that immigrants with savings abroad come from more affluent families than those who have no savings abroad, and hence the former are less likely to remit. Among immigrants who remit, the amount sent abroad is not correlated with savings.

Consistent with other studies, immigrants who are employed on a full-time basis are significantly more likely to remit than those who are employed part time or are not in the labour force, with predicted probabilities of 29%, 25% and 21%, respectively. However, employment status is not correlated with the amount sent.

The probability of remitting is not significantly associated with the level of education that immigrants had when they arrived in Canada. However, conditional upon remitting, the amounts sent abroad by immigrants with high school or less are 20% to 25% less than the amounts sent by those with a university degree.

Finally, place of residence is positively correlated with both the incidence of remitting and the amounts remitted. The predicted probability of remitting ranges from 21% among immigrants in Montréal to 34% among immigrants in Calgary or Edmonton. Through the 2000s, the labour markets in Calgary and Edmonton have been especially robust, fuelled by the oil and gas industries and high world commodity prices. In 2004, for example, the unemployment rates for men aged from 25 to 44 in Edmonton and Calgary (at 3.7 and 4.4, respectively) were about half the rate in Montréal (at 8.7). The greater incidence of remitting among immigrants in these cities likely reflects favourable labour market circumstances and perhaps positive expectations about future earnings potential. Among immigrants who remitted, those residing in Calgary/Edmonton and Vancouver sent about 16% more than those residing in Toronto.

4.2.3 Obligations to family

Although LSIC information on family members abroad is limited, the evidence that is available is consistent with the view that remittance behaviours are shaped by family characteristics. The likelihood of remitting and the amounts remitted are negatively correlated with the number of minor children present in the household. The predicted probability of remitting is 18% for immigrants in households with three or more children present, compared with 27% for immigrants in households with no children. Furthermore, conditional on remitting, the amount sent by immigrants with one or two children is from 17% to 19% less and the amount sent by immigrants with three or more children is 36% less than that sent by immigrants with no children.

The importance of family characteristics is also evident in intentions to sponsor family members to come to Canada. Immigrants who are already sponsoring or intend to sponsor a spouse or child to come to Canada are more likely to remit than those immigrants with no sponsorship activities or intentions—predicted probabilities of 36% and 23%, respectively. Those sponsoring a child or parent send approximately 23% more than those with no sponsorship involvement. The same patterns are evident among immigrants sponsoring a parent or grandparent: their predicted probability of remitting is 30%, and they send approximately 12% more than those with no sponsorship involvement. These findings are consistent with other studies reporting that immigrants remitting to support children and spouses tend to send more than those remitting to other family members (Stanwix and Connell 1995).

4.2.4 Characteristics of migration

Although descriptive statistics indicated little difference in the incidence of remitting across immigration categories, the picture changes somewhat when other characteristics are taken into account. More specifically, the predicted probability of remitting is somewhat higher among family-class immigrants (at 27%) than among economic immigrants (at 23%). Similarly, the predicted probability of remitting is 28% among refugees, although this estimate is just over the level of confidence. Conditional upon remitting, immigration category is not correlated with the amount sent abroad.

4.2.5 Organizational involvement

Of the two organizational participation/involvement variables included in the model, one is significant: specifically, immigrants who belong to a religious organization are more likely to remit than those who do not—with predicted probabilities of 28% and 24%, respectively. Organizational involvement is not correlated with the amounts remitted.

4.2.6 Region of birth

A set of dummy variables included in the model identifies immigrants from nine world regions. These variables capture inter-regional differences in remittance behaviours net of the characteristics documented above. Again, the differences are large as the predicted probability of remitting is highest among immigrants from Southeast Asia and from the Caribbean and Guyana (at 52%), followed by immigrants from Eastern Europe and sub-Saharan Africa (at 35% and 32%). The likelihood of remitting is lowest among immigrants from West Asia, the Middle East and North Africa (at 16%), North America, Western Europe and Oceania (at 17%) and East Asia (at 18%). Among immigrants who remitted, those from East Asia remitted the largest amounts.

Finally, remittance behaviours are significantly associated with GDP per capita in the country of birth. The predicted probability of remitting is highest among immigrants from countries with GDP per capita below $2,000 (at 38%) and lowest among those from countries with GDP per capita of $8,000 to $14,999 (at 18%) or $15,000 or more (at 12%).

4.3 Multivariate results, regional comparisons

Given the considerable variation in the remittance behaviours of immigrants from different regions, one question that arises is whether the correlates of remitting are the same across all of them. In other words, are the factors associated with remitting 'universal' or do they vary from region to region? To address this question, separate regression models are estimated for immigrants in nine world regions. Readers should note that three of these models are based on underlying samples of less than 800 respondents, and the likelihood of regression coefficients being statistically significant is reduced as a result. Because of this we run these models using a simplified specification: some covariates were excluded because they are correlated with region—this is the case of immigrant category—while others, such as number of children, were re-grouped in fewer categories.

A number of characteristics are consistently correlated with remittance behaviours across immigrants from different regions of origin (Tables 6 and 7). This is most evident in terms of financial capacity. The likelihood of remitting and the amount remitted are both positively and significantly correlated with family income in seven of the nine regional models. Similarly, employment status is correlated with the likelihood of remitting in six of the nine models, but with the amount remitted in only two of the nine. Finally, savings abroad are negatively correlated with the likelihood of remitting in five of the nine models, but they are not correlated with the amount sent in any of them.

Turning to family characteristics, the correlation between presence of children and the likelihood of remitting and the amount remitted is significant in four of the nine models, and it approaches significances in five. The positive correlation between sponsorship of a family member and the likelihood of remitting is significant in five of the nine models, but it is significantly correlated with the amounts sent in only two.

In terms of demographic characteristics, the negative correlation between older ages and the likelihood of remitting is significant in six of the nine regional models, but it is significantly correlated with the amount sent in only one.

Overall, the significance of financial and family characteristics is far more evident in terms of the decision to remit than in the amounts sent. Furthermore, results from our models suggest that there is considerable inter-regional consistency in some of the factors correlated with remittance behaviours, most notably in financial and familial characteristics.

There are a number of other instances where the correlates of remittance behaviours appear to be more uniquely evident within specific regions of origin. For example, there is a negative correlation between being female and the likelihood of remitting among immigrants from South Asia and from West Asia, the Middle East and North Africa. Such correlations are not at all evident among immigrants from other regions, suggesting that gender may play a different role in remittance behaviours among immigrants from different regions.

Within the research literature, evidence on the significance and direction of the correlation between education and remitting is mixed. This is also the case in our results. Among immigrants from Eastern Europe, those with less than high school are less likely to remit than those with a university degree. Similarly, among immigrants from the Caribbean and Guyana, those with a postsecondary credential are less likely to remit than those with a university degree. The direction of the correlation runs in the opposite direction among immigrants from Central and South America and from East Asia, as immigrants with lower levels of educational attainment are more likely to remit. However, conditional on remitting, immigrants with lower levels of educational attainment send less money abroad than those with university in three of the nine regional models.

Finally, there is a strong, positive correlation between membership in an organization and remitting among immigrants from sub-Saharan Africa and from West Asia, the Middle East and North Africa. This suggests that organizational ties may play a different role in the remittance behaviours of immigrants from different regions.

 

¹³ All dollar figures have been rounded to the nearest $100. Remittance amounts reported two years and four years after arrival have not been adjusted for inflation. Questions about remitting and remittance amounts were included in the income section of the Longitudinal Survey of Immigrants to Canada questionnaire. This section includes numerous questions about the income of the respondent and respondent's family, all of which refer to the 12-month period preceding the interview. At the end of the section, respondents were asked if they had remitted since their last interview and, if so, how much they had remitted. Here, the reference period shifts from the 12 months preceding the survey to the 18- or 24-month period preceding the survey (the duration varies between Waves 2 and 3). Given the sudden shift in the reference periods, we cannot be certain if respondents who reported remittance amounts had a 12-month or 18/24-month reference period in mind.

¹⁴ The estimates in Figure 1 are computed by taking the average of the incidences of remitting at the Longitudinal Survey of Immigrants to Canada (LSIC) Wave 2 (i.e., 24 months after landing) and at LSIC Wave 3 (i.e., 48 months after landing). This approach reduces standard errors around the estimates, which are still large in many cases, and simplifies the presentation of the data. The same approach is used for Figure 2.

¹⁵ For immigrants who remitted we also computed average total family income after expenditures on housing— including rent or mortgage, taxes and utilities—and used this to estimate remittances as a share of family income after expenditures on housing. For immigrants in all three admission categories, remittances accounted for about from 4.0% to 4.9% of family income after expenditures on housing.