The aim of this thesis is threefold: to investigate, from the viewpoint of the home
country, the effects of macroeconomic variables and policies on the flow of remittances;
and to investigate the microeconomic foundations of the effects of remittances on both
household expenditure and the labour force, with a specific application to Kosovo. For
the macroeconomic determinants of remittances, a unique dataset is assembled using
World Bank data with policy variable data collected from individual countries in the
sample. For the implications of remittances on household expenditure and the labour
force the United Nations Development Program Remittances Survey is used.
The estimates suggest that the key determinants of remittances/GDP and remittances per
capita are real living standards in both the home (negatively) and the main host country
(positively). The effect of GDP in the host country is not linear, but increases at
decreasing rate. An original contribution of this section is the inclusion of specific
policies applied to migrants and their remittances. However, despite the support for such
policies in the literature, the policy variables modelled are statistically insignificant
across several specifications.