Summary: Money flowing from individuals to their home countries can be more effective than foreign aid. Better transparency and value in remittance fees can improve the results.
Citation: 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] (See link below)
Links: Per Enter The Net style guide, all in-line links have been removed, including endnote citations. All links, including for the endnotes themselves, are located in the links section at the end of the article. They appear in the order in which ther were cited in the article.
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. 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. 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%. 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 countries, 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. 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.
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. Money sent or brought back by migrants accounts for up to 20% to 30% of GDP in Nicaragua, El Salvador, and Honduras. (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.)
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.
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. Beyond providing care, it also helps to prevent child deaths by improving access to better sanitation. 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.
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.
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.

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. 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%. 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. 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.
In the meantime, Carlos Hernández Mejía, like millions of other migrants, is making a big difference for his family — one transfer at a time.
Glossary
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.
Links
Link to original article. The great global redistributor we never hear about: money sent or brought back by migrants, Our World In Data, 2025
Remittances matter: 8 facts you don’t know about the money migrants send back home, United Nations, 17 June 2019
Remittances Slowed in 2023, Expected to Grow Faster in 2024, World Bank June 2024
Foreign Aid Facts and Trends, Our World in Data
World Bank income groups, Our World in Data
World Migration Report, United Nations
World Development Indicators, World Bank
A journey through borders: Understanding migration in Central America, World Bank Blogs, 18 January 2024
Half of all child deaths are linked to malnutrition, Our World in Data, 8 September 2024
For Health, Strength, and Daily Food: The Dual Impact of Remittances and Public Health Expenditure on Household Health Spending and Child Health Outcomes, The Journal of Development Studies, 3 Sept 2014
Are Remittances Good for Your Health? Remittances and Nepal’s National Healthcare Policy, Eastern Economic Journal, 4 April 2018
How do remittances impact child mortality and are there preconditions? Social Science & Medicine, September 2023
The influence of remittances on education and health outcomes: a cross country study, Applied Economics, 25 July 2011
How Do Transaction Costs Influence Remittances, International Monetary Fund Working Papers, 4 November 2022
Remittance costs as a proportion of the amount remitted, 2021, Our World in Data
What Explains Remittance Fees? Panel Evidence, International Monetary Fund, April 2022, (downloads PDF)
Reduce transaction costs for migrant remittances, Sustainable Development Goal indicator 10.C.1., Our World in Data
Migrants hit by high fees to send money home, BBC, 29 April 2024
Send Money Pacific, website sponsored by governments to increase remittance fee transparency
The share of immigrants in high-income countries doubled between 1990 and 2020, Our World in Data, 25 December 2024
En dan nu het goede nieuws: het gaat steeds beter met Nederland, de Correspondent, 23 January 2023
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Enlightenment Now by Steven Pinker
Gosh, this is a sticky issue, isn’t it? Are these people taking jobs away from Americans? I don’t think you can convince me that this is just foreign aid. And I agree with the comment that people who receive the remittances now have little incentive to get jobs of their own.