Migrant worker remittances and their impact on local economic development

The international labour migration has become a common approach for many poor countries to alleviate unemployment and to work out from poverty. These countries are generally characterized by soaring unemployment, low economic development, and high population growth rate. Remittances and skills gained from working abroad are thought to be the crucial outcomes of migration, which will have profound impact on economic development and welfare of individual migrant family, community and the nation. The study of remittance flows and uses in Lao PDR is an attempt to estimate the amount of remittances sent home by Lao migrant workers in Thailand, to understand the sending channels, and to examine the use of remittances and the potential impacts. The study shows that Lao migrant workers send home on average 27,659 Thai baht per annum. The remittances have been largely used for household consumption, while little is left for investment and income generation. Nevertheless, remittances have contributed to improvement in living standard of migrants’ household. The usual channels for sending remittances are through the private money transfer, the informal channel, and friends or relatives. Migrant workers tend to regularly remit money home during the fist few years of migration. Male migrants send about 56 percent higher than the amount send by female workers. This is due mainly to gender bias in the types of job engaged and the level of wages earned between men and women. In Lao PDR, the positive impact of remittances on development would be higher if the formal financial services, such bank and micro–credit institution are widely accessible to migrant workers and their family.