Does Political Instability Affect Migrant Behavior?

Countries of origin have long considered remittances as an important source of development. The main purpose of this paper is to analyze whether and how remittances react to political shocks in these countries. We focus on the case of Tunisia by investigating the reaction of Tunisian migrants through their remittances to the Arab Spring. Using event-study methodology adapted to the examination of remittance patterns, our results reveal that the response is significant 3 months after the Arab Spring and tends to dissipate 5 months from the occurrence of the event. Overall, migrant remittances may act as immediate and direct aid to households harmfully affected by economic crises resulting from civil unrest and political upheaval.