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The Link between International Remittances and Private Interhousehold Transfers

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  • Beyene, Berhe Mekonnen

    (Dept. of Economics, University of Oslo)

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    Abstract

    The paper studies the link between international remittances and interhousehold transfers. Using a simple insurance model, it is shown that households transfer a large fraction of the remittance they receive from relatives abroad to other households. The effect of remittances on interhousehold transfers is empirically investigated using an urban household survey from Ethiopia. Consistent with the prediction of the model, remittance has a strong positive effect on the amount of transfer given, controlling for total household income and other covariates.

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    File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2012/Memo-14-2012.pdf
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    Bibliographic Info

    Paper provided by Oslo University, Department of Economics in its series Memorandum with number 14/2012.

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    Length: 30 pages
    Date of creation: 15 Mar 2012
    Date of revision:
    Handle: RePEc:hhs:osloec:2012_014

    Contact details of provider:
    Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
    Phone: 22 85 51 27
    Fax: 22 85 50 35
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    Web page: http://www.oekonomi.uio.no/indexe.html
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    Related research

    Keywords: international remittances; interhousehold transfers; mutual insurance; Ethiopia;

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    1. Mitrut, Andreea & Nordblom, Katarina, 2010. "Social norms and gift behavior: Theory and evidence from Romania," European Economic Review, Elsevier, vol. 54(8), pages 998-1015, November.
    2. Wolff, Francois-Charles, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
    3. Richard Adams, 2011. "Evaluating the Economic Impact of International Remittances On Developing Countries Using Household Surveys: A Literature Review," Journal of Development Studies, Taylor & Francis Journals, vol. 47(6), pages 809-828.
    4. Harounan Kaziango, 2004. "Motives for Household Private Transfers in Burkina Faso," Working Papers 895, Economic Growth Center, Yale University.
    5. Donald Cox & Zekeriya Eser & Emmanuel Jimenez, 1996. "Motives for Private Transfers over the Life Cycle: An Analytical Framework and Evidence for Peru," Boston College Working Papers in Economics 327., Boston College Department of Economics.
    6. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
    7. Eskander Alvi & Seife Dendir, 2009. "Private Transfers, Informal Loans and Risk Sharing Among Poor Urban Households in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 45(8), pages 1325-1343.
    8. Adams, Richard H. Jr., 2007. "International remittances and the household : analysis and review of global evidence," Policy Research Working Paper Series 4116, The World Bank.
    9. Claudia Martínez Alvear & Dean Yang, 2007. "Remittances and Poverty in Migrants’ Home Areas: Evidence from the Philippines," Working Papers wp257, University of Chile, Department of Economics.
    10. Cox, Donald & Hansen, Bruce E. & Jimenez, Emmanuel, 2004. "How responsive are private transfers to income? Evidence from a laissez-faire economy," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2193-2219, August.
    11. Luc Christiaensen & Lei Pan, 2010. "Transfers and Development: Easy Come, Easy Go?," Working Paper Series wp2010-125, World Institute for Development Economic Research (UNU-WIDER).
    12. Eskander Alvi & Seife Dendir, 2009. "On consumption insurance in poor urban areas: Evidence from Ethiopia," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(5), pages 699-713.
    13. Behrman, Jere R & Pollak, Robert A & Taubman, Paul, 1982. "Parental Preferences and Provision for Progeny," Journal of Political Economy, University of Chicago Press, vol. 90(1), pages 52-73, February.
    14. Simon Davies, 2011. "What Motivates Gifts? Intra-Family Transfers in Rural Malawi," Journal of Family and Economic Issues, Springer, vol. 32(3), pages 473-492, September.
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