We can think of these private transfers of capital as an unofficial form of foreign aid.
The payments are an important way that capital flows on a person-to-person basis from wealthier countries with strong economies to areas where opportunities are more limited. We can think of these private transfers of capital as an unofficial form of foreign aid, with obvious benefits for the recipients and indirect benefits for the donors. Such payments not only provide money for those in need, but in the process they also strengthen low-income economies and create a market for American goods and services. Increasing the well-being of low-income families is in the economic interests of the United States and tends to reduce the spread of disease and can on the margin reduce the undocumented flow of migrants by bolstering emerging economies. Last year, American workers sent nearly $73 billion in remittances to other countries, according to estimates from the World Bank Group’s knomad.org. Overall, global remittances are expected to total $800 billion this year. Remittances to India alone were valued at $100 billion, while $60 billion was sent to families in Mexico. Families in China received $50 billion from workers abroad.