The Relationship Between Social Capital and Remittance Inflows: Evidence from a Panel of 92 Countries

This study investigates the association between social capital and received personal remittances per capita using panel data of 92 countries from 1984 to 2024. Across all specifications, the results show that social capital index exhibits a negative and statistically significant association with received remittances per capita, indicating that countries with higher social cohesion, stronger trust networks, and more reliable institutions receive substantially fewer remittances. This result supports the substitution hypothesis: stronger domestic social support structures is associated with reduction in household dependence on private transfers from migrants. The findings highlight the importance of incorporating social dimensions into remittance research and suggest that remittance-dependent economies should reinforce social protection systems and institutional trust to reduce vulnerability. The study also provides new empirical evidence on how social capital operates as a structural determinant of transnational financial flows.