, Volume 50, Issue 4, pp 1279–1301 | Cite as

Remittances in the Republic of Georgia: Correlates, Economic Impact, and Social Capital Formation



The economic impact of remittances on migrant-sending countries has been a subject of debate in the scholarly literature on migration. We consider the topic using a household-level approach. We use a new survey, “Georgia on the Move,” to examine migrant-level, household-level, and contextual variables associated with the probability that a household in the Republic of Georgia receives remittances. We then apply propensity score matching to estimate how remittances affect particular types of household expenditures, savings, labor supply, health, and other measures of well-being. Separate analysis of the subsample of households with a migrant currently abroad distinguishes the effects of remittances from the effects of migration as such. In Georgia, remittances improve household economic well-being without, for the most part, producing the negative consequences often suggested in the literature. We find evidence for an important aspect that has not been widely discussed in prior studies: remittances foster the formation of social capital by increasing the amount of money that households give as gifts to other households.


International migration Remittances Economic well-being Social capital 

Supplementary material

13524_2013_195_MOESM1_ESM.pdf (302 kb)
ESM 1(PDF 302 kb)


  1. Acosta, P., Calderon, C., Fajnzylber, P., & Lopez, H. (2008). What is the impact of international remittances on poverty and inequality in Latin America? World Development, 36, 89–114.CrossRefGoogle Scholar
  2. Adams, R. H. (1989). Worker remittances and inequality in rural Egypt. Economic Development and Cultural Change, 38, 45–71.CrossRefGoogle Scholar
  3. Adelman, I., & Taylor, J. E. (1992). Is structural adjustment with a human face possible? The case of Mexico. Journal of Development Studies, 26, 387–407.CrossRefGoogle Scholar
  4. Amuedo-Dorantes, C., & Pozo, S. (2006). Migration, remittances and male and female employment patterns. American Economic Review: Papers and Proceedings, 96, 222–226.Google Scholar
  5. Amuedo-Dorantes, C., & Pozo, S. (2011a). New evidence on the role of remittances on healthcare expenditures by Mexican households. Review of Economics of the Household, 9, 69–98.CrossRefGoogle Scholar
  6. Amuedo-Dorantes, C., & Pozo, S. (2011b). Remittances and income smoothing. American Economic Review, 101, 582–587.CrossRefGoogle Scholar
  7. Arguillas, M. J. B., & Williams, L. (2010). The impact of parents’ overseas employment on educational outcomes of Filipino children. International Migration Review, 44, 300–319.CrossRefGoogle Scholar
  8. Badurashvili, I. (2004, April). Determinants and consequences of irregular migration in a society under transition. The case of Georgia, Caucasus. Paper presented at the annual meeting of the Population Association of America, Boston, MA. Retrieved from
  9. Becker, S., & Ichino, A. (2002). Estimation of average treatment effects based on propensity scores. The Stata Journal, 2, 358–377.Google Scholar
  10. Borraz, F. (2005). Assessing the impact of remittances on schooling: The Mexican experience. Global Economy Journal, 5, 1–29.CrossRefGoogle Scholar
  11. Chappell, L., Angelescu-Naqvi, R., Mavrotas, G., & Sriskandarajah, D. (2010). Development on the move: Measuring and optimising migration’s economic and social impacts. London, UK: Institute for Public Policy Research.Google Scholar
  12. Cohen, J. H. (2005). Remittance outcomes and migration: Theoretical contests, real opportunities. Studies in Comparative International Development, 40, 88–112.CrossRefGoogle Scholar
  13. de Haas, H. (2010). Migration and development: A theoretical perspective. International Migration Review, 44, 227–264.CrossRefGoogle Scholar
  14. de la Brière, B., Sadoulet, E., de Janvry, A., & Lambert, S. (2002). The roles of destination, gender, and household composition in explaining remittances: An analysis for the Dominican Sierra. Journal of Development Economics, 68, 309–328.CrossRefGoogle Scholar
  15. Durand, J., Kandel, W., Parrado, E. A., & Massey, D. S. (1996a). International migration and development in Mexican communities. Demography, 33, 249–264.CrossRefGoogle Scholar
  16. Durand, J., Parrado, E. A., & Massey, D. S. (1996b). Migradollars and development: A reconsideration of the Mexican case. International Migration Review, 30, 423–444.CrossRefGoogle Scholar
  17. Garip, F. (2008). Social capital and migration: How do similar resources lead to divergent outcomes? Demography, 45, 591–617.CrossRefGoogle Scholar
  18. Garip, F. (2012). Repeat migration and remittances as mechanisms of wealth inequality in 119 communities from the Mexican Migration Project data. Demography, 49, 1335–1360.CrossRefGoogle Scholar
  19. International Organization for Migration (IOM). (2008). Review of migration management in Georgia. Geneva, Switzerland: IOM. Retrieved from
  20. Kanaiaupuni, S. M., & Donato, K. M. (1999). Migradollars and mortality: The effects of migration on infant survival in Mexico. Demography, 36, 339–353.CrossRefGoogle Scholar
  21. Koc, I., & Onan, I. (2004). International migrants’ remittances and welfare status of the left-behind families in Turkey. International Migration Review, 38, 78–112.CrossRefGoogle Scholar
  22. Korobkov, A. V. (2007). Migration trends in central Eurasia: Politics versus economics. Communist and Post-Communist Studies, 40, 169–189.CrossRefGoogle Scholar
  23. Lipton, M. (1980). Migration from the rural areas of poor countries: The impact on rural productivity and income distribution. World Development, 8, 1–24.CrossRefGoogle Scholar
  24. Lu, Y., & Treiman, D. J. (2011). Migration, remittances, and educational stratification among blacks in apartheid and post-apartheid South Africa. Social Forces, 89, 1119–1143.CrossRefGoogle Scholar
  25. Lucas, R. E. B., & Stark, O. (1985). Motivations to remit: Evidence from Botswana. Journal of Political Economy, 93, 901–918.CrossRefGoogle Scholar
  26. Mansoor, A., & Quillin, B. (Eds.). (2007). Migration and remittances: Eastern Europe and the former Soviet Union. Washington, DC: The World Bank.Google Scholar
  27. Massey, D. S., Arango, J., Hugo, G., Kouaochi, A., Pellegrino, A., & Taylor, J. E. (2005). Worlds in motion: Understanding international migration at the end of the millennium (2nd ed.). Oxford, UK: Clarendon Press.Google Scholar
  28. Massey, D. S., & Parrado, E. (1994). Migradollars: The remittances and savings of Mexican migrants to the USA. Population Research and Policy Review, 13, 3–30.CrossRefGoogle Scholar
  29. Morgan, S. (2001). Counterfactuals, casual effect heterogeneity, and the Catholic school effect on learning. Sociology of Education, 74, 341–374.CrossRefGoogle Scholar
  30. Murphy, J., Baxter, R., Eyerman, J., Cunningham, D., & Kennet, J. (2004, May). A system for detecting interviewer falsification. Paper presented at the American Association for Public Opinion Research 59th Annual Conference, Phoenix, AZ.Google Scholar
  31. Portes, A., & Sensenbrenner, J. (1993). Embeddedness and immigration: Notes on the social determinants of economic action. The American Journal of Sociology, 98, 1320–1350.CrossRefGoogle Scholar
  32. Rapoport, H., & Docquier, F. (2005). The economics of migrants’ remittances (IZA Discussion Paper No. 1531). Bonn, Germany: Institute for the Study of Labor.Google Scholar
  33. Reichert, J. S. (1981). The migrant syndrome: Seasonal U.S. wage labor and rural development in central Mexico. Human Organization, 40, 56–66.Google Scholar
  34. Rubenstein, H. (1992). Migration, development and remittances in rural Mexico. International Migration, 30, 127–153.CrossRefGoogle Scholar
  35. Seddon, D. (2004). South Asian remittances: Implications for development. Contemporary South Asia, 13, 403–420.CrossRefGoogle Scholar
  36. Semyonov, M., & Gorodzeisky, A. (2005). Labor migration, remittances and household income: A comparison between Filipino and Filipina overseas workers. International Migration Review, 39, 45–68.CrossRefGoogle Scholar
  37. Semyonov, M., & Gorodzeisky, A. (2008). Labor migration, remittances and economic well-being of households in the Philippines. Population Research and Policy Review, 27, 619–637.CrossRefGoogle Scholar
  38. Smith, H. L. (1997). Matching with multiple controls to estimate treatment effects in observational studies. Sociological Methodology, 27, 325–353.CrossRefGoogle Scholar
  39. Stark, O. (1991). The migration of labor. Cambridge, MA: Basil Blackwell.Google Scholar
  40. Stark, O. (1995). Altruism and beyond. Cambridge, MA: Basil Blackwell.CrossRefGoogle Scholar
  41. Stark, O., & Bloom, D. (1985). The new economics of labor migration. American Economic Review, 75, 173–178.Google Scholar
  42. Stark, O., Taylor, J. E., & Yitzhaki, S. (1986). Remittances and inequality. The Economic Journal, 96, 722–740.CrossRefGoogle Scholar
  43. Taylor, J. E. (1999). The new economics of labour migration and the role of remittances in the migration process. International Migration, 37, 63–68.CrossRefGoogle Scholar
  44. Taylor, J. E., & Dyer, G. A. (2009). Migration and the sending economy: A disaggregated rural economy-wide analysis. Journal of Development Studies, 45, 966–989.CrossRefGoogle Scholar
  45. Tchaidze, R., & Torosyan, K. (2009). Georgia on the move (Report by the CRRC/ISET team for the Development on the Move study commissioned by the GDN/IPPR). Tbilisi, Georgia: International School of Economics.Google Scholar
  46. Todaro, M. P. (1969). A model labor migration and urban underemployment in less developed countries. American Economic Review, 59, 138–148.Google Scholar
  47. United Nations. (2009). International migration report 2006: A global assessment. Retrieved from
  48. Zachariah, K. C., Mathew, E. T., & Irudaya Rajan, S. (2001). Impact of migration on Kerala’s economy and society. International Migration, 39, 63–87.CrossRefGoogle Scholar

Copyright information

© Population Association of America 2013

Authors and Affiliations

  1. 1.Department of SociologyUniversity of Wisconsin–MadisonMadisonUSA
  2. 2.International School of Economics at Tbilisi State UniversityTbilisiGeorgia

Personalised recommendations