Determinants of Remittances: The Case of the South Asian Community in Manchester

Abstract

This paper investigates the remittance behaviour of the South Asian community using new data from Indian, Pakistani and Bangladeshi households in Manchester. The findings show that standard variables such as income, employment, education, linkages to the home country and host country are important determinants of remittances. Although remittances are sent mainly for consumption purposes, those sent for land acquisition and savings have stronger association with the amount of remittances. In addition, we find strong evidence for the remittance decay hypothesis for Indian and Pakistani migrants, but not for Bangladeshi migrants.