The great global redistributor we never hear about: money sent or brought back by migrants
Migrants send or bring back over three times the amount of money provided by global foreign aid. Cutting transaction fees could make this support even more effective in reducing poverty.
Every year, Carlos Hernández Mejía, a 35-year-old research scientist in Amsterdam, sends 3,000 to 4,000 euros to help maintain his mother’s house in Mexico. During the pandemic, he also helped his brother, sending 300 euros a month to cover rent while he was studying.
Carlos is one of 200 million migrants who regularly send back money to support their families and communities.1 These cash transfers reach around 800 million people globally — more than the populations of the United States and the European Union combined.
Imagine a classroom of 30 students representing the world’s population; at least three would get money from remittances — one in ten people.
These payments have quietly become a major force in helping families pay school fees, make repairs to their homes, and cover medical bills.
The World Bank estimates that money sent back by migrants constitutes around two-thirds of what is called “remittances” in global statistics.2 The rest comes from border, seasonal, and other short-term jobs abroad or work with non-resident employers, such as embassies and international organizations.
In this article, we’ll ditch the jargon and refer to remittances as money sent back or brought back by migrants. “Sent back” refers to personal transfers, and “brought back” refers to the compensation of employees.
Migrants send and bring back much more money than the total global foreign aid
The amount of transfers sent or brought back by migrants adds up a massive amount. To see how much, let’s compare it to foreign aid.
Foreign aid is money transferred from one country to another, usually to support people in a lower-income country. It’s often seen as one of the largest efforts to redistribute wealth around the world.
However, as the chart below shows, the amount of money sent or brought back by migrants was more than three times larger than foreign aid in 2021. We don’t often hear about these flows, but their scale is far bigger.
Most of this money flows from rich countries to poorer ones
So, the amount of money sent or brought back by migrants is larger than foreign aid. But, most foreign aid flows to countries in need, such as low-income and middle-income countries. Is the same thing true for money sent or brought back by migrants?
If migrants were only sending money from Denmark to the Netherlands or from Switzerland to Monaco, the effects on global inequality would be minimal. But that’s not what’s happening.
As the chart below illustrates, high-income countries send $680 billion but only receive $195 billion. In other words, people in these countries provide 87% of the funds while receiving just 25%.3 Economic resources from high-income countries are being redistributed abroad.
The main beneficiaries are middle-income countries. Upper-middle-income countries send 7% but receive 30%, and lower-middle-income countries send only 4% but receive 44%.
This also means that very little money reaches the poorest countries4, where people need it the most. Low-income countries receive just 1.7% of all money sent or brought back by migrants, despite being home to 9% of the global population.
Small sums from rich countries go a long way in poorer nations
Money sent or brought back by migrants has a big impact on recipient nations.
According to the UN, migrant workers send back about 15% of their earnings on average.5 But even a little money from rich countries can make a big difference in poorer ones. For example, 15% of the average annual income in the United States is nearly twice the average annual income in Colombia.6
The chart below illustrates that many countries receive remittances in amounts that are large relative to their gross domestic product (GDP). In over thirty countries, remittances account for more than 10% of the value of their entire economies.
Consider Central American countries, where many people have emigrated to high-income countries like the United States.7 Money sent or brought back by migrants accounts for up to 20% to 30% of GDP in Nicaragua, El Salvador, and Honduras.8
How money sent back by migrants improves living conditions around the world
What happens when these funds reach families in poorer countries?
In low-income and lower-middle-income countries, an extra $100 from money sent or brought back by migrants can be the difference between a child going hungry and a child getting enough to eat. Research shows that money sent back by migrants reduces child malnutrition, helping children grow healthier and stronger.9
It also covers healthcare where formal insurance systems fall short. Families can afford doctor visits, buy medicine, or pay for treatments that would otherwise be out of reach.10 Beyond providing care, it also helps to prevent child deaths by improving access to better sanitation.11 It functions as a private safety net from families rather than governments.
With money sent from abroad, children can also stay in school longer. Thanks to Carlos, his brother in Mexico could afford rent and finish university. Data from Ghana shows that families receiving money from relatives abroad enroll their children in school at higher rates, from primary school to secondary education.12
The more money lost to fees, the less families benefit from what migrants send back
There’s a big problem for people who move to new countries and want to help their families. When they send money, a significant share is lost to banks and money-transfer companies before their families receive it. These fees, known as transaction costs, are one of the biggest hurdles stopping migrants from giving their families more support.
Transaction costs reduce the money received in two ways. First, they directly bite into the amount of money migrants send. But they also have an indirect impact: research from the IMF shows that when fees are high, migrants often send less overall, knowing that a bigger chunk of what they send won’t make it to their families.13
If governments want to make it easier for migrants to help their families, lowering these transaction costs is key. The chart below shows that fees are moving in the right direction. The median fee for sending money has dropped from 8% in 2011 to 6% in 2020.14
The United Nations wants to bring this global average below 3%, with no remittance route exceeding 5% by 2030, as part of its Sustainable Development Goals.
But despite recent progress, we are still far from this target. For example, sending $100 from Uganda to the Democratic Republic of Congo can cost as much as $10 — more than double the UN’s recommended maximum.15 The global average of 6% is still twice as high as the target.
Governments can make it cheaper for migrants to send money back in at least three ways. First, they can require money transfer companies to clearly show all fees and exchange rates so migrants aren’t left guessing and can pick the cheapest option. This added transparency can also help drive prices down as companies compete to offer better deals.
Second, they can reduce the costs of money sent back by migrants by creating shared payment networks that connect banking systems across countries. For instance, when the US and Mexico linked their central banks’ payment systems, it slashed remittance fees to $0.67 per transaction with an exchange rate spread of only 0.21%.16 Expanding this model to more countries could save migrants even more.
Finally, governments could launch official remittance cost comparison websites, as Australia and New Zealand have done for sending money to the Pacific Islands.
The IMF estimates that meeting the UN’s remittance cost goals could lead to an extra $32 billion sent back each year.17 This would allow more families to pay for school, healthcare, and basic needs in places where every dollar counts.
Migration doesn’t only result in redistribution through money sent or brought back by migrants. Since the percentage of migrants in high-income countries is growing faster than in other regions, the direct impact of income increases can also be significant. For example, the bottom 5% of earners in the Netherlands earn more than the top 5% in Morocco.18
In the meantime, Carlos Hernández Mejía, like millions of other migrants, is making a big difference for his family — one transfer at a time.
Breaking down remittances
Remittances include both personal transfers (money sent back by migrants) and employee compensation (money brought back). Since these are different things, it would be better to analyze each category separately to better understand if increases are driven by transfers or employment.
Unfortunately, the World Bank does not currently provide that level of detail in the data that it publishes. Access to this breakdown would greatly enhance our understanding of the actual trends and their impacts.
Continue reading on Our World in Data
Most international migrants don’t move very far from their home countries
Long-distance moves are becoming more common, but they remain the exception. For most, international migration still means crossing a nearby border, not an ocean.
How do countries measure immigration, and how accurate is this data?
Countries estimate how many people move in and out using censuses, surveys, and border records. How accurate are these numbers, and can they account for illegal migration?
Foreign Aid
Who gives and receives foreign aid? Which forms does it take? What are examples of when it was (un-)successful?
Endnotes
United Nations (2019). Remittances matter: 8 facts you don’t know about the money migrants send back home.
World Bank (2024). Migration and Development Brief 40, page 10.
While 25% may still seem surprisingly large to some, it is likely more due to income from employment than personal transfers. Germany and France, for instance, are in the top 10 receiving countries globally in 2022, but this was largely due to the salaries of cross-border workers in Switzerland. Source: International Organization for Migration (2024). World Migration Report 2024, page 36.
Low-income countries account for approximately 9% of the global population.
United Nations (2019). Remittances matter: 8 facts you don’t know about the money migrants send back home
For this example, we refer to data on GDP per capita from the World Bank. In 2023, the GDP per capita in the United States was $82,769.41. In Colombia, it was COL$30,053,963.64. The USD/COP average exchange rate was 4,323.28. So, 15% of the U.S. average income is $12,415.41 (0.15 × 82,769.41). Converting this into Colombian pesos and comparing it to Colombia’s GDP per capita: (12,415.41 × 4,323.28)/ 30,053,963.64 = 1.8x the average income in Colombia. This is a rough back-of-the-envelope calculation. Of course, income differs from earnings, and some migrants don’t send the local currency, but it’s enough to give us a ballpark figure.
World Bank (2024). A journey through borders: Understanding migration in Central America.
Some economists worry that extreme reliance on remittances creates a dependency trap. If too many people rely on money sent from abroad, fewer may feel the need to join the workforce, which could hurt the local economy in the long run. It also leaves the country vulnerable to sudden shifts in exchange rates. But there is no clear agreement on where the tipping point is. International Organization for Migration (2024). World Migration Report 2024, page 36.
Terrelonge (2014). For Health, Strength, and Daily Food: The Dual Impact of Remittances and Public Health Expenditure on Household Health Spending and Child Health Outcomes.
This paper suggests that a 10% increase in remittance income leads to an increase in healthcare spending of between 2% and 4%. Chezum et al. (2018). Are Remittances Good for Your Health? Remittances and Nepal’s National Healthcare Policy.
This paper indicates that a 10% increase in remittance income results in a 0.8% decline in the under-five mortality rate from diarrheal diseases, while they do not change the under-five mortality rate from neonatal disorders or respiratory infections. Ramkissoon & Deonanan (2023). How do remittances impact child mortality and are there preconditions?
This paper suggests that a 1% increase in real remittances per capita results in a 0.12% increase in the proportion of children enrolled in secondary school and an increase of 0.09% in the primary completion rate. Zhunio et al. (2011). The influence of remittances on education and health outcomes: a cross country study
Higher fees may also boost informal flows, such as people bringing cash themselves. Kpodar & Imam (2022). How Do Transaction Costs Influence Remittances
Beck et al. (2022). What Explains Remittance Fees? Panel Evidence
BBC (2024). Migrants hit by high fees to send money home
The exchange rate spread is the small extra cost added to the exchange rate for currency conversion. World Bank (2006). Global Economic Prospects 2006. Chapter 6: Reducing Remittance Fees. p.148, Box 6.4
Kpodar & Imam (2022). How Do Transaction Costs Influence Remittances
Frederik (2023). En dan nu het goede nieuws: het gaat steeds beter met Nederland
Chezum et al. (2018). Are Remittances Good for Your Health? Remittances and Nepal’s National Healthcare Policy.
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Simon van Teutem and Tuna Acisu (2025) - “The great global redistributor we never hear about: money sent or brought back by migrants” Published online at OurWorldinData.org. Retrieved from: 'https://ourworldindata.org/great-global-redistributor-money-sent-brought-back-migrants-remittances' [Online Resource]BibTeX citation
@article{owid-great-global-redistributor-money-sent-brought-back-migrants-remittances,
author = {Simon van Teutem and Tuna Acisu},
title = {The great global redistributor we never hear about: money sent or brought back by migrants},
journal = {Our World in Data},
year = {2025},
note = {https://ourworldindata.org/great-global-redistributor-money-sent-brought-back-migrants-remittances}
}
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