Dominican Republic: five myths about migration and remittances

The Dominican Republic received a record number of remittances in 2020, which were a lifeline to help more than 400 thousand households during COVID-19 , one of the worst economic crises. Latino migrants in general, and Dominicans in particular, supported their families from abroad despite their own difficulties with employment during the pandemic.

Nevertheless, the issue of migration is surrounded by many myths and preconceptions, so it is necessary to offer empirical evidence to illustrate that migration is an opportunity when there are policies in place to maximize its benefits.

The semi-virtual International Seminar on Migration, Remittances and Development, organized by the National Institute of Migration (INM) and the Ibero-American University (UNIBE) helped to clarify some of the myths about the relationship between migration and remittances, poverty, and education, among others. 

During the Seminar, national and international experts discussed the benefits and challenges of maximizing the gains from migration, with contributions from a multidisciplinary team from the World Bank, Inter-American Development Bank (IDB), Center for Latin American Monetary Studies (CEMLA), and the Ministry of Economy, Planning and Development (MEPyD) in the Dominican Republic.

Here we demystify five myths of the impact of migration:

1. Remittances don’t reduce poverty. A common myth on the issue of remittances is that they do not contribute to reducing poverty and inequality, since they are received by the families of the richest because they are the only ones who can leave the country. This is based on a few examples, rather than substantial evidence. The household survey of the Central Bank of the Dominican Republic shows that, without remittances, poverty would have increased from 23.4% to 25.3% in 2020 . Remittances also finance health and education, ease credit constraints for small businesses, and help cushion against adverse shocks during crises and natural disasters.
2. Those who receive remittances become dependent on them. The myth states that remittances generate dependency because families get used to receiving and so choose not to work. However, studies show that remittances create opportunities for children to go to school and not have to work, and for women to study instead of remaining in the job market . A study in 2020 found that remittances increase spending on education by approximately 53% in Latin America. Equally, a study in 2021 in Cameroon found that international remittances promote the education of girls aged 5 to 25 years with the largest positive effect on girls of college-age (18-25 years).
3. Remittances are the only benefit of migration. There is a myth that the benefits of migration for the country of origin are only accounted for in remittances. In reality, remittances drive a wide variety of productive activities and thus contribute to development in communities of origin when policies are created to ensure safe and orderly migration . The Dominican diaspora is one of the most successful and united in the world, it favors the transfer of knowledge and skills and is a cornerstone in facilitating trade, tourism, technology, investment, innovation, and philanthropy, among other aspects.
4. Families that receive remittances “waste” them on luxuries, not essentials. There is a myth that remittances are invested only in luxury consumption and not for investments. Rather, they help address the basic needs of the home and improve the quality of life of families. Families that receive remittances use them mainly for their daily life, as the consumption of food, clothing, and transportation.
5. Remittances create economic stagnation back home. Does the lack of competitiveness cause migration, or do remittances and migration generate a lack of competitiveness?  This argument assumes that high levels of remittances can cause a vicious cycle of economic stagnation and dependence.  A study in 2014 showed that remittances have a positive effect on the societies from which migrants originate.  Likewise, despite its effect on the appreciation of the Dominican peso, the money that Dominicans abroad send home is key to the development of their families and communities of origin.

William Swing, former Director General of the International Organization for Migration, once said: "... migration is a process, not a problem." In the past, migration was seen as a negative aspect of development. Today it is increasingly recognized as a way to improve the development of countries, and not only through remittances.

Migration is a source of multiple benefits when there are the right policies in place to harness them. Well managed, migration has the potential to enhance social and economic development in sending and host countries.