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Remittances, Banking Status and the Usage of Insurance Schemes

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  • Dorothee Crayen
  • Christa Hainz

    ()

  • Christiane Ströh de Martinez

Abstract

Empirical evidence that migrants send home more remittances after disasters raises the question of whether remittances can be used to self-insure, substituting for both formal and informal insurance. We investigate this question using a unique data set on the usage patterns of financial services by households in South Africa. We show that the likelihood that a respondent has a formal funeral cover increases with income and banking status. However, it is lower for individuals receiving remittances, which supports the idea that remittances act as (self-) insurance. We also show that purchasing formal funeral cover is influenced by other risk management strategies and that determinants of informal insurance differ from those of formal insurance.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3117.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3117

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Keywords: remittances; insurance; risk management strategies;

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References

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  2. Mohapatra, Sanket & Joseph, George & Ratha, Dilip, 2009. "Remittances and natural disasters : ex-post response and contribution to ex-ante preparedness," Policy Research Working Paper Series 4972, The World Bank.
  3. Banerjee, Abhijit & Duflo, Esther, 2006. "The Economic Lives of the Poor," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5968, C.E.P.R. Discussion Papers.
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  7. Zeller, Manfred & Sharma, Manohar, 2000. "Many borrow, more save, and all insure: implications for food and micro-finance policy," Food Policy, Elsevier, Elsevier, vol. 25(2), pages 143-167, April.
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Cited by:
  1. Yu-Fu Chen & Michael Funke, 2010. "Global Warming And Extreme Events: Rethinking The Timing And Intensity Of Environmental Policy," Dundee Discussion Papers in Economics, Economic Studies, University of Dundee 236, Economic Studies, University of Dundee.
  2. Dorothee Crayen & Christa Hainz & Christiane Ströh de Martínez, 2011. "Zur Versicherungsfunktion von Rücküberweisungen von Migranten: Eine Untersuchung in Südafrika," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 64(10), pages 17-21, 05.
  3. Chen, Yu-Fu & Funke, Michael, 2010. "Global Warming And Extreme Events: Rethinking The Timing And Intensity Of Environmental Policy," SIRE Discussion Papers, Scottish Institute for Research in Economics (SIRE) 2010-48, Scottish Institute for Research in Economics (SIRE).

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