Definition
Remittances are the money migrants send home to family — typically small, regular transfers used for daily expenses, school fees, debt repayment, or to fund the next migrant's travel.
Remittances are one of the largest and least-tracked financial flows in modern history. The World Bank now estimates global remittance flows at over $600 billion per year, exceeding total foreign direct investment to low- and middle-income countries combined. For some countries — Tajikistan, Honduras, El Salvador, the Philippines — remittances are 15% or more of GDP and the dominant external income source. The pattern is older than the data: it powered Italian and Irish migration to the U.S. a century ago, and it powered the Great Migration in the U.S. interior.
Why it matters
How it works
The typical remittance pattern is small and steady. A migrant in the destination earns a wage, sets aside a fraction, and sends it home — often monthly, often timed to family needs. The amount is small per transfer (tens to hundreds of dollars) and the frequency is what matters. Over years and decades, the accumulated flow is enormous. At the destination, the migrant lives on less than their wage; at the origin, the receiving household lives on more than the local economy alone would provide.
Remittances have a use pattern that has been studied carefully. The largest share typically goes to daily consumption — food, rent, utilities. The next share goes to education for younger siblings or children. Healthcare is the third largest category. A smaller but consequential share goes to investment — a small business, a piece of land, an addition to the house — and to next-migrant funding: the train fare or visa application fees that bring another family member out. The investment share is what economists hope will translate remittances into long-run development; the consumption share is what keeps origin households alive and functioning.
The Great Migration's remittance story is less well-quantified than modern flows but no less real. Letters from Wilkerson's archival sources, and from contemporaneous newspapers, show steady cash flowing south from Chicago, Detroit, and Harlem to Mississippi, Florida, and the Carolinas — paying for sick parents' care, funding nieces' tuition at colored schools, and advancing train fare for the next cousin. The flows were rarely captured in any official statistic, but they were how many Southern Black households kept their footing during the long agricultural collapse.