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Authors. --- Lindgren, Astrid, --- 1900-talet. --- Sverige
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The EU freedom of movement is a core value of European integration and facilitates transnational migration within the Union. All types of migrants make remittances to the home country. The aim of this thesis is to examine the importance of macro variables in determining intra-EU aggregate remittances. The novelty of the thesis is to integrate an intra-EU perspective into the well-established body of theoretical and methodological literature developed to explain North-South remittance linkages. The thesis covers 19 EU Member States that serve as host countries for migrants from 42 countries within and in the proximity of the EU, using bilateral remittance data from the World Bank for 2010-2014. A total of 768 country pairs are covered by the study. Drawing on previous empirical literature, the thesis employs a gravity model to cover the macro explanatory variables that most frequently indicate a statistically significant impact on aggregate remittances. The explanatory variables included in the thesis concern host and home country economic activity, macroeconomic conditions, unemployment, gravity conditions, and the stock of migrants. Fixed and random effects regression models are employed for estimation. A home country EU membership dummy is applied to estimate the impact of EU membership on aggregate remittance flows. Despite the increases in intra-EU migration facilitated by the EU freedom of movement, the results indicate that EU membership does not directly promote intra-EU remittances. However, EU membership may serve as a mediating variable, facilitating remittances through the promotion of intra-EU migration. The impact on the explanatory power of the model and statistical significance of the estimates of the host country GDP per capita and the gravity variables further confirm that a gravity model, especially combined with the stock of migrants, is appropriate for understanding aggregate remittance flows. The thesis confirms existing literature suggesting that a combination of remittance motives need to be taken into account to explain remittance behaviour. It challenges literature that argues that either home or host country characteristics are more important in determining aggregate remittance flows.
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