The Transfer of the Remittance Fee from the Migrant to the Household

This paper discusses the problem of increasing remittances. It is often argued that the remittance fee needs to be lowered to increase remittances. We show that remittances become larger by increasing the receiving fee whereas they become larger by reducing the sending fee. We also show that, by transferring the sending fee from the migrant to the household, remittances become larger than those without the transfer. It is shown that for this purpose the home country’s government can collect the sending fee from the household as taxes, and to pay it to the migrant as a subsidy.