The amount of money worldwide that migrants and foreign workers send back home increased by more than 50 percent over the past decade, according to a new analysis.
Technically known as ‘remittances,’ the total amount of these cash transfers grew from $296 billion dollars in 2007 to $445 billion in 2016 – triple what is spent by rich countries on foreign aid each year.
Roughly 1 billion people will either send or receive money, from abroad this year, according to the International Fund for Agricultural Development (IFAD), which sponsored the study and published the report Sending Money Home.
The upward trend in remittances worldwide represents a significant increase that has weathered a global financial crisis and increasing anti-immigrant policies in many wealthy countries. The money sent back home by foreign workers does a lot to reduce poverty globally, a fact not widely recognized by the public or policy makers.
Nearly half of the money sent home goes to people living in rural areas, according to the analysis. Families use the money to pay for food, health, education and to support businesses, which for the poorest communities typically are focused on farming.
World Bank head Jim Kim called remittances an important way to help end extreme poverty by 2030 because of their ability to ‘increase prosperity.’