Remittances, Banking Status and the Usage of Insurance Schemes
AbstractEmpirical 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 InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3117.
Date of creation: 2010
Date of revision:
remittances; insurance; risk management strategies;
Other versions of this item:
- Dorothee Crayen & Christa Hainz & Christiane Ströh de Martinez, 2012. "Remittances, Banking Status and the Usage of Insurance Schemes," Ifo Working Paper Series Ifo Working Paper No. 137, Ifo Institute for Economic Research at the University of Munich.
- D14 - Microeconomics - - Household Behavior - - - Personal Finance
- F24 - International Economics - - International Factor Movements and International Business - - - Remittances
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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