The Remittance Profile of Jamaican Immigrants

• Author: Ransford W. Palmer
• Pages: 258-279

~ 258 ~

FREEDOM AND CONSTRAINT IN CARIBBEAN MIGRATION AND DIASPORA

IntroductionIntroduction

IntroductionIntroduction

Introduction

The flow of remittances from immigrants abroad is an important source

of foreign exchange for Jamaica. Each year this flow reflects the

cumulative impact of past migration. The chapter develops a profile of the

remittances of those who migrated over the previous ten years, using data

for the period 1975 to 2000. It also attempts to assess how economic

conditions in the United States and changing interest and exchange rates

in Jamaica may affect the profile. Finally, the chapter examines the impact

of the flow of remittances on economic growth. The results show that

immigrants begin to have a significant net positive impact on the flow of

remittances around the fifth year of migration; that rising interest rates

and falling exchange rates have had a positive and negative impact on

remittance flows, respectively; and that the annual flow of remittances

had little or no impact on aggregate capital formation and the rate of real

economic growth.

Remittances1 from immigrants2 abroad account for a significant share

of foreign exchange for Caribbean countries. This chapter focuses on Jamaica,

a country with a high dependence on the inflow of remittances from its

nationals abroad. In recent years, there has been a plethora of studies

examining the impact of remittances on the economies of origin countries

but none so far has examined the remittance profile of the immigrants.

This profile is important because it indicates how long it takes an immigrant

cohort to begin to have a positive impact on the annual flow of remittances

to its home country.

The Remittance Profile of Jamaican

Immigrants

RANSFORD W. PALMER

1515

1515

15

~ 259 ~

THE REMITTANCE PROFILE OF JAMAICAN IMMIGRANTS

The migration process is driven largely by the desire to maximize

household3 income. In Jamaica where average household income is one

tenth of that in the United States, this desire has produced one of the

highest emigration rates in the world. The migration process is circular in

character with the flow of remittances operating as a vital link between the

migrant and the members of his household left behind. Remittances finance

the consumption of these household members as well as their ultimate

reunification abroad. Remittances not only enhance the welfare of family

members left behind; they provide confirmation of a better life abroad

and therefore a strong incentive to migrate. When the household is reunited

abroad, the circle is closed and remittances cease. Thus the flow of

remittances is an indicator of the existence incomplete migration circles.

By 2000 the flow of remittances had become the second largest share of

Jamaica’s foreign exchange earnings, behind receipts from tourism (See

figure 15.1). The size of this inflow influences the national exchange rate

and its dependability improves the credit rating of the government in

international capital markets.

Figure 15.1: Shares of tourist receipts (TR), migrant remittances (MR)

and bauxite and alumina exports (BA) in GDP, 1970-2000.

0

10

20

30

40

70 75 80 85 90 95 00

TRGDP MRGDP BAGDP

Exports (BA) in GDP, 1970-2000.

The source for figure 15.1 is as follows: Based on data from Statistical Abstracts of the Statistical

Institute of Jamaica; International Monetary Fund Country Reports; and the Bureau of

Labor Statistics of the U.S. Department of Labor.