Less is known about the impact of remittances, return migration and diaspora links on development in Georgia

Compared to the body of research work on the determinants of emigration, research on its impact on development is limited, despite the fact that remittances and return migration are an increasingly important phenomenon.

A 2007 study found that most households spent the majority of the money received as remittances on everyday consumption, while investment remained limited and mainly confined to real estate (EBRD, 2007). A more recent study confirmed that remittances are seldom used for productive investments (Badurashvili and Nadareishvili, 2012). Another study suggests that young and better-educated people living in urban areas are more likely to receive remittances, raising the suspicion that they do not reach the most vulnerable parts of society and thus could increase inequality (Gugushvili, 2013).

Another recent study found that remittances contribute to fostering social capital formation by providing households with the means to help out other households in need. They do not appear to provide disincentives for work or create downward pressure on the earnings of those left behind, as previous research in other countries has suggested (Gerber and Torosyan, 2013). The study also confirmed that most remittance income is used for consumption, but found increases in education and healthcare expenditure in urban areas and improved health outcomes in rural areas.

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