Do Migrant Remittances React to Bouts of Terrorism?

Abstract

This paper examines the short-run behaviour of migrant remittances in the face of terrorism. Using monthly data for post 9/11 terrorist attacks in Pakistan, the study finds evidence of increase in the volume of remittances sent from abroad. This increase is evident in the aggregate, as well as for the three main source regions of North America, the Persian Gulf and Europe. The positive association holds for all the top five migrant-hosting countries of Pakistan. The findings point in favour of an altruistic behaviour of migrant remittances at the macroeconomic level.

Keywords: Remittances, Terrorism, Pakistan, 9/11

JEL Classification: D74, F51, O5