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Study: Remittances by recent immigrants

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The Daily


Wednesday, July 23, 2008
2001 to 2005

Roughly 4 in 10 immigrants who arrived in Canada during 2000/2001 sent money to family or friends abroad at least once during their first four years in the country.

Over the entire period, about 41% of immigrants sent money home at least once. Within 6 to 24 months of landing, 23% of immigrants had sent remittances to their home country; within two to four years after landing, about 29% had done so.

Among those who sent money home, the average amount was $2,500 in the first period, and $2,900 in the second period.

The incidence of sending money varied considerably from country to country. The proportion was highest among immigrants from the Philippines and Haiti, and lowest among those from France, the United Kingdom and South Korea.

The likelihood of immigrants remitting depended on three additional factors — their income, family obligations in Canada and abroad and demographics.

According to World Bank figures for 2004, remittances represent an important source of revenue for people in developing countries. They accounted for about 20% to 30% of gross domestic product (GDP) in countries such as Haiti, Lesotho and Jordan, and for about 10% to 19% in several others, such as Jamaica, the Philippines and the Dominican Republic.

Remittance behaviour varies by region of birth

The practice of sending remittances varied widely by regions of the globe. Over half of immigrants from Southeast Asia and the Caribbean and Guyana sent remittances home two to four years after landing, compared with about 40% of those from sub-Saharan Africa and Eastern Europe.

About one-quarter of the respondents from South Asia and Central and South America sent remittances during this period. About one-fifth of those from East Asia or West Asia, the Middle East and North Africa did so.

Average amounts sent also differed. Two to four years after landing, immigrants from East Asia sent $3,900, whereas immigrants from the Caribbean and Guyana sent $1,600.

The incidence of remitting was highest among those from countries with lower GDP per capita. Around 36% of immigrants from countries with per capita GDP of less than $4,000 sent money home, compared with only 11% from countries with per capita GDP of $15,000 or more.

The variation was particularly striking by country of birth. Some 60% of immigrants from the Philippines and Haiti sent remittances two to four years after landing. About 40% to 50% of immigrants from Jamaica, Nigeria, Romania, Guyana and Ukraine sent money. However, less than 10% of immigrants from France, the United Kingdom and South Korea, all industrialized nations, did so.


Note to readers

Data for this study came from the Longitudinal Survey of Immigrants to Canada (LSIC).

The study, published today in the Analytical Studies Branch Research Paper Series, used data from the LSIC to document the incidence of remitting, amounts and the characteristics of the people who sent money home. A shorter version appears in Perspectives on Labour and Income.

The survey was conducted jointly by Statistics Canada and Citizenship and Immigration Canada. It followed one group of immigrant, those aged 15 or older who arrived in Canada between October 1, 2000 and September 30, 2001, over a four-year period.

The group was interviewed three times: six months after their arrival, two years after arrival and four years after arrival. About 7,700 of the original panel of 12,000 responded to all three questionnaires. These respondents were a representative sample of 157,600 new immigrants: 104,400 in the economic class, 42,600 in the family class and 9,700 refugees.

Because the study focused on immigrants who arrived in Canada during 2000/2001, its results cannot be generalized to all immigrants.


Economic-class immigrants send larger amounts

In general, immigrants enter Canada under three main classes: economic, family or refugee. Economic-class immigrants made up two-thirds of those included in the Longitudinal Survey of Immigrants to Canada.

About 30% of immigrants in all three categories made remittances between two and four years after landing. Among those who did, economic immigrants sent $3,000 on average, compared with $2,700 for family class immigrants and $1,900 for refugees.

Immigrants who had family incomes of $70,000 or more were more than three times as likely to send money home as those with family incomes of less than $10,000.

In addition, the amount sent by immigrants in families with incomes of $70,000 or more was about 45% higher than the amount for those with incomes of $25,000 to $44,999.

Demographic characteristics

Immigrants with three or more children at home were far less likely to send money abroad than those with no children.

There were also other demographic factors. For example, women sent about 12% less than men. Also, immigrants aged from 25 to 44 were far more likely to send money abroad, and far higher amounts, than those in younger or older age groups.

The study "Remittance behaviours among recent immigrants in Canada" is now available as part of the Analytical Studies Branch Research Paper Series (11F0019MIE2008312, free) from the Analytical Studies module of our website. The abridged version "Remittances by recent immigrants" is now available in the July 2008 issue of Perspectives on Labour and Income (75-001-XWE, free), from the Publications module of our website.

Related studies from the Business and Labour Market Analysis Division can be found in Update on Analytical Studies Research (11-015-XIE, free), which is also available from the Publications module our website.

For more information, or to enquire about the concepts, methods or data quality of this article, contact Grant Schellenberg (613-951-9580; grant.schellenberg@statcan.gc.ca), Business and Labour Market Analysis Division.