In many developing countries, remittances or any form of cash transfers can be a lifeline for families or even entire communities. This is because oftentimes the family breadwinner will work in a city or even abroad to provide for their families. Relying on remittances is more common among rural families. However, with the prevalence of migrant laborers working abroad, this reliance on remittance may now no longer be exclusive to rural communities.
Migrant workers from developing countries come from a more diverse population range. Many may be from rural areas, but many are also urbanites who migrate to search for better opportunities abroad. For example, many migrant workers from South Asia and Southeast Asia migrate to the Middle East to work as laborers and domestic workers, but with many also having typically middle class professions such as engineers and financial services. Many of these migrant workers send money home for their families and are the primary breadwinner of their families.
Money sent by migrant workers not only provides sustenance for their families, but are also vital for their families to improve their overall welfare. The money can be used to fund small businesses or their children’s education so that they can attain higher education which oftentimes the parent who are migrant workers were previously not able to attain.
Remittance economies in developing countries provide a source of income and promise of social security and progress for many families. Remittance economies also often boost the migrant workers’ origin countries’ foreign exchange reserves. Money sent from abroad contributes to the recipient countries’ gross domestic product by being an intake of foreign currency reserves.