Economic Policy Uncertainty and Remittance Nexus: Evidence From Top 10 Remittance-receiving Countries

Remittances are a major source of income for many countries. In this regard, the importance of remittances to national economies is increasing. Altruism and self-interest are the two main motivations for remitting. Economic policy uncertainty may determine which of these motivations is more prevalent. Therefore, the aim of this study is to examine the altruism and self-interest hypotheses. In this study, unbalanced panel data are used to analyse the remittances received by the top 10 countries. These countries account for half of all remittances in the world. Due to cross-sectional dependence in our dataset, we need to use methods with robust standard errors. The results of four different estimation methods used for panel data are consistent. Economic policy uncertainty has a negative impact, whereas economic growth has a positive impact on remittances. These findings indicate that people who send remittances act out of self-interest. Trade openness contributes to an increase in remittances. Furthermore, the wealth effect shaped by self-interest leads to an increase in remittances from workers.