One of the key sources of income for many people in developing countries is remittances sent home by relatives who have emigrated to other countries. According to the UN’s 2009 Human Development Report, the average amount of remittances received during 2007 by persons living in sub-Saharan Africa was $26. This is a significant sum, given the high number of people living on less than the international poverty threshold of US$1.08 per day at 1993 purchasing-power parity.
The family members of those who migrate to wealthier countries are the most direct beneficiaries of migration. The money which gets sent home benefits the local economy and helps to provide foreign exchange earnings for the home country. The home country can also benefit from the migrant’s increased access to ideas, knowledge and resources which enhance progress. On the other hand, remittances increase demand for the home-country currency, driving up the value of the currency and making exports from the home country less competitive in the global marketplace.
According to the report, the amount of remittances received by developing countries is on average around four times as great as the total amount of official development aid received. The report indicates that migration has a significant impact on reducing poverty, with poverty rates falling for households with at least one member who has emigrated or moved to a wealthier location within the same country.