Dual-Citizenship-Driven Remittances and Impact on Social Welfare Indicators: A Study of Developing Countries

Abstract

Recent research has focused upon rising remittance inflows into developing countries as a consequence of growing international migration and how this plays a central role in their economy. On the other hand, dual citizenship is increasingly being recognized in a number of countries as a strategy to stimulate diaspora investments. This paper studies the effect of dual-citizenship-driven remittances on household welfare in migrant-sending countries. Analyzing a large panel dataset of 154 developing countries over the period 1960-2010, we find that dual-citizenship-driven remittances positively affect classical welfare indicators such as child survival and life expectancy. The findings are robust to the inclusion of a range of control variables, and when using plausible instruments to address possible endogeneity issues associated with remittances. The analysis suggests that foreign remittances improve household welfare by raising consumption.