US Remittances to the Caribbean, Jamaica and Trinidad & Tobago

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Abstract

A remittance is part of an employee's wages or salary that is sent back home. Remittances not only help the workers' family members, but also help the home countries to strengthen their balance of payments. Remittances are remuneration to employees from the economy in which they work, and thus they contribute to both the gross domestic product (GDP) and the gross national income (GNI) of that economy. Because of their stability and dependability, remittances have become a permanent fixture of governments' financial revenues. The primary objective of this research is to determine whether foreign nationals make a significant contribution to the level of remittances and what some of the determinants are. We utilize three models to test whether the categories of foreign nationals – immigrants admitted; persons naturalized; and non-immigrants admitted as temporary workers, exchange visitors and intra-company transferees – send significant amounts of remittances. In this work, we look at the flow of remittances during the 1982–2001 period from the United States to the Caribbean region, Jamaica, and Trinidad and Tobago. The results indicate that the number of “immigrants admitted”, “persons naturalized” and “non-immigrants admitted as temporary workers, exchange visitors and intra-company transferees”, together with the “exchange rate”, the “Hispanic unemployment rate” and the “median income of Hispanic families”, are significant determinants in the size of remittances. When the results are extrapolated, the number of “immigrants admitted” produces the maximum remittance flow to Jamaica. The number of persons naturalized is important to the total remittances for the overall Caribbean region. The non-immigrant temporary worker group is the largest single source of remittances. This group may potentially send US$15 billion to Trinidad and Tobago.

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