Remittance Theory

Remittance Theory explains how money sent by workers to their home countries—called remittances—affects the economy. When workers abroad send money home, it provides families with extra income, boosting local consumption and investment. This inflow can improve living standards and support community development. For host countries, remittances can also influence labor markets and currency stability. Overall, the theory highlights the significant role of international money transfers in shaping economic growth, income distribution, and development strategies across countries.