Remittances linked to capital formation
Comparing Gross capital formation (constant 2015 US$), per capita with Personal remittances, paid (current US$), per capita across 147 countries, 2018–2025.
- Rank correlation
- +0.77
- Holding size constant
- +0.71
- Countries compared
- 147
- Period
- 2018–2025
What might link these
The relationship between personal remittances and gross capital formation might be driven by the fact that remittances can contribute to investment in a country. A careful reader should be cautious about the potential role of education level, as it could influence both the ability to send and receive remittances and the capacity to invest in capital formation. Education level could be a likely confounder in this relationship.
Why this is not proof of anything
This is a correlation across countries, not an experiment. It cannot show that either indicator causes the other, and both may simply follow a third thing. This correlation could mislead by implying a direct causal link between remittances and capital formation, when in fact other factors like institutional stability or economic policies might be driving both indicators.
The second figure above repeats the measurement with national population and income held constant. It is the more conservative number: a relationship that largely disappears there was mostly telling you that larger, richer countries have more of most things.
How this was measured
Both indicators were ranked across every country reporting each, and the two rankings compared — ranks rather than raw values, because a handful of very large countries can otherwise manufacture a relationship on their own. The calculation is arithmetic over figures already published on this site; the commentary above is drafted from the two indicator names and the resulting coefficients.