Title   Consequências Macroeconómicas e Fatores Explicativos das Remessas de Emigrantes: O Caso Português (Original)
Macroeconomic Consequences and Explanatory Factors of Emigrant Remittances: The Portuguese Case (EN)
Author  Violeta Vieira Pinto
Advisor  João Carlos Lopes and João Alfredo dos Reis Peixoto
Year  2024
Institution  ISEG (Higher Institute of Economics and Management, the University of Lisbon)
Degree  Masters
Area  International Economy and European Studies
Keywords  Emigration, Remittances, Macroeconomic Impacts, Portugal
URI https://www.iseg.ulisboa.pt/estudar/trabalhos-finais-de-mestrado/eiee/566398812171561/

Abstract

Portugal historically has been a country marked by high emigration, with significant waves of citizens leaving the country over the years in search of a better life, especially during economic crises where job prospects are low and economic instability is high. A strong connection has been established between portuguese communities abroad and their families in Portugal through remittances. This dissertation analyzes the macroeconomic impact of emigrants' remittances on the portuguese economy, emphasizing the historical evolution and explanatory factors that condition remittance flows. The research begins with a review of the relevant literature, which provides a foundation for understanding emigration patterns and the macroeconomic consequences of remittances. The analysis highlights the crucial role that remittances play in the economy, particularly during times of economic instability, such as the balance of payments imbalances in the 1970s and 1980s, where remittances contributed to stabilizing the
economy by compensating for the shortage of foreign capital. However, after Portugal joined the EEC in 1986, dependence on remittances diminished due to the increase availability of EU financial aid (structural funds). An econometric analysis conducted for the period between 1953 and 2020 shows that despite the positive impact of GDP on remittances, macroeconomic variables such as the unemployment rate and the inflation rate have a limited capacity to explain fluctuations in remittance flows. The analysis concludes that other factors, such as social, cultural and political, also play a significant role, suggesting that the relevance of remittances goes beyond economic explanations alone.