Transforming Lives: The Power of Remittances in the Dominican Republic

Since 1492, the Dominican Republic has served as a melting pot in the New World, embracing and fostering immigration from its inception.

The Dominican Republic, from its cuisine to its music, is known for its culture deeply shaped by Spanish, African, and indigenous roots, further enriched by European and Middle Eastern immigration, such as from Italy or Lebanon, beginning in the 18th century.

Located on the eastern side of La Hispaniola island, which it shares with neighboring Haiti, the Dominican Republic’s immigrant stock was officially estimated to be as high as 850,000 people in 2017, a big number for a country with a population of 11 million.

Nowadays, it’s common to hear Dominicans joke that “everyone has an uncle in New York,” and this saying holds some truth. Many Dominicans have historically migrated abroad to provide for their families.

Migration Patterns in the Dominican Republic: Past and Present

Migration patterns in the Dominican Republic have shifted significantly over time, with emigration playing a central role in the country’s history. The death of Rafael Trujillo, the country’s military dictator, in 1961 proved to be a pivotal moment as it ushered in a new era of international movement. Nowadays, around 10% of the Dominican population lives abroad.

Most of the Dominicans who sought fresh opportunities abroad ended up in the United States, where by 2021 there were at least 2.4m people of Dominican origin, according to the Pew Center.

For comparison, in 1960 there were just 12,000 Dominican immigrants living in the United States. This increased fivefold in the next ten years to 61,000, nearly tripled by 1980 and hasn’t stopped growing ever since, explained Babich and Batalova in their article “Immigrants from the Dominican Republic in the United States”.

Going back to that typical Dominican joke, lighthearted as it may be, it is, in fact, rooted in data. The overwhelming majority of Dominicans (57%) living in the United States reside in the greater New York metropolitan area, a percentage that equates to more than 600,000 people. This number dwarfs both Boston and Miami at 7% and 6%, respectively.

As for the rest of the world, Dominicans also made the move to Europe in the decades following the dictatorship. Thanks to the deep economic changes it was going through after joining the European Union, the common language they share, as well as the old colonial ties of the past, many ended up in Spain.

According to INE, by 2022 there were over 190,000 Dominicans living in the Iberian nation, making it the fourth-largest Latin American group in the country.

The Role of Remittances in the Dominican Economy

Clearly, migration is an important aspect of the Caribbean island. Dominicans go abroad, particularly to the United States, seeking better opportunities to support their families.

So, like many other countries across the globe, remittances – which can be defined as the action of sending money back to a migrant’s native country – play a crucial role in the Dominican Republic’s economy, with close to $10bn dollars being sent in 2022 to the Caribbean nation.

The money Dominicans send back home provides a significant source of income for many households, contributing to poverty reduction and improved living standards. These remittances also boost the country’s economy, stimulate consumption, aid national development and account for a substantial portion of its GDP per capita, which currently stands at $10,716 according to the World Bank.

Between 2020 and 2023, the money Dominican families received from abroad represented, on average, 9% of its GDP, with peaks of 10.4% and 11% in 2020 and 2021, respectively, according to the Dominican Republic Central Bank (BCRD).

BCRD data also showed that the received money tended to concentrate in the country’s metropolitan areas. In fact, remittances to metro areas have increased from 54.9% in 2015 to 58.3% in 2023. The National District, where the capital Santo Domingo lies, takes the biggest slice of the money, 35.6%, while the remaining provinces saw little to no change.

The link to the United States plays a pivotal role when it comes to these all-important transfers. The BCRD explained that over 2 million Dominicans, of which 1.3 million are foreign born, live in the United States.

Many Methods to Manage Money

This vast, United States-based diaspora has had a knock-on effect on Dominicans back home. The BCRD explained that some 62% of remittances are paid out in US Dollars, while the remaining 38% is done so in Dominican Pesos.

The metaphorical weight this cash money holds is significant. Many Dominicans choose to have their funds delivered to them by their Money Transfer Operator (MTO) of choice, who subsequently employ over 700 delivery people to carry out this service, according to the BCRD.

The Dominican Republic Central Bank also states that funds received through MTOs account for around 80% of all formal channel transactions, which in 2023 reached a total of 34 million.

Similarly to Peru, remittances received through informal channels account for about 11% of the total flows between 2021 and 2023, the BCRD said. These funds are usually transferred in cash by Dominican migrants when they visit from abroad.

You can read more about the difference between formal and informal remittance channels here.

Remittances: More than Just Money

The complexities caused by the Covid-19 pandemic meant that remittances turned out to be a lifeline for many Dominican families. This money greatly helped to stabilize the economy by reducing poverty in a time of need. Without these remittances, poverty would have increased from 23.4% to 25.3%.

Moreover, remittances are of great importance to children when it comes to their education. While most countries will see a rise of up to 35% in education spending thanks to remittances, the study “A meta-analysis of the effects of remittances on household education expenditure” also found that in Latin America that figure grows to 53%, creating the necessary opportunities for kids to go to school and not have to work to help support their families. 

In the Dominican Republic, it was concluded that children were more likely to go to school if they came from a remittance-receiving household, according to the paper “Accounting for Remittance and Migration Effects on Children’s Schooling”, by Catalina Amuedo-Dorantes and Susan Pozo.

Stemming from that education, the Dominican diaspora is one of the most successful migrant communities in the world, according to the World Bank. This is because remittances help beneficiaries acquire new skills, which in turn develops communities, favoring the transfer of knowledge.

When it comes to healthcare, remittances also play a huge role. Typically, health services are almost inaccessible to many of the lower-income families in the Dominican Republic. Therefore, the money these families receive contributes greatly towards expenses like medication or hospital care, products and services they would not be able to access without external financial support.

An opportunity to further financial inclusion

Like many other developing nations, the Dominican Republic still needs to incorporate large sections of society into its financial system. But it’s a problem that is being tackled by the country’s central bank (BCRD), who presented the findings of their financial inclusion report in March 2024.

In it, they detailed how, as of 2023, around 55% of adults in the country now have access to at least one financial product, such as savings or credit accounts. This marks a notable improvement from 2019 when the rate was 51%. Over 500,000 additional Dominicans were integrated into the financial system during this period, which the BCRD say reflects the progress in financial accessibility and literacy​ across the country.

Despite these improvements, challenges remain, especially in rural areas and among certain demographics. The eastern region of the Dominican Republic experienced the most growth, with financial product ownership rising from 42% to 51%. The southern region also saw an increase, from 43% to 50%.

Public programs aimed at financial education have also played a role in expanding access, the report revealed. Over 78% of participants said they had learned to save money more effectively, 69% had managed to improve the handling of their income, while 51% acquired the ability to budget more precisely.

The BCRD also suggested that new initiatives and products specifically tailored to Dominican remittance receivers could increase financial inclusion, which would also help ease costs.

Getting Money Where Dominicans Need It

Migration and the subsequent remittance flows have played a crucial role in shaping the Dominican Republic’s economy and society. With over 10% of the Dominican population living abroad, overwhelmingly in the U.S. and Spain, remittances have become an essential lifeline for many households. In 2022 alone, nearly $10 billion were sent back home, making up around 9-11% of the country’s GDP during the 2020-2023 period.

This steady flow of funds from overseas helps reduce poverty, supports education, and improves access to healthcare, significantly contributing to national development.

At Ria, we play a vital role in facilitating this processf by providing reliable and accessible remittance services across the Dominican Republic. As the Dominican Central Bank notes, approximately 80% of formal remittances are processed through money transfer operators (MTOs).

By making it easier for families to receive funds from loved ones abroad, Ria contributes to the country’s economic stability, further promoting financial inclusion and supporting the Dominican population in achieving a better quality of life.

Looking to send money back to the Dominican Republic? We’ve got you covered. Thanks to our great online and in-store services, your transfers, home delivery and bank deposits will reach your loved ones swiftly and safely. Download our app for iOS or Android to get started.