A rejoinder to “The impact of infectious diseases on remittances inflows to India”

ABSTRACT

We argue that the volume of remittances sent home by migrants is influenced by the exogenous likelihood that the duration of their migration will be cut short. A higher probability of reverse migration, brought about by the collapse of jobs in the wake of COVID-19, made migrants attach greater importance to the creation of a social and economic environment in their places of origin that can support them when they return. There are several ways in which this can be done. One is by instilling gratitude. When bigger remittances are responded to by greater gratitude, the support will be bigger. An impact of the COVID-19 pandemic on migrants’ perceived duration of their migration is an increase in the uncertainty of the duration. The good will of migrants’ families and communities at origin is a form of insurance. A standard response to uncertainty is to take out insurance, and when uncertainty is higher, insurance is more valuable, and there is a tendency to acquire more of it. As it happens, the link between the volume of remittances and the likelihood of return migration does not feature at all in Shastri’s (2022) paper, nor for that matter in related writings by the World Bank and the IMF. The purpose of this rejoinder is to draw attention to this link, inducing students of migrants’ remittances to explore the link.