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Garbage in, Gospel Out? Controlling for the Underreporting of Remittances

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Author Info

  • Tigran A. Melkonyan
  • David A. Grigorian
  • J. Scott Shonkwiler

Abstract

Empirical studies that use self-reported data on remittances to measure the latter''s impact on microeconomic incentives mostly ignore the potential errors associated with reporting/measurement issues. An econometric procedure to control for these errors is developed and applied to household-level data from Armenia. We find evidence of systematic under-reporting of remittances. After controlling for this, we find a strong negative impact of remittances on incentives to work.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 08/230.

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Length: 19
Date of creation: 01 Sep 2008
Date of revision:
Handle: RePEc:imf:imfwpa:08/230

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Related research

Keywords: Labor supply; Workers remittances; Data collection; Financial incentives; Economic models; remittances; migration; equation; remittance; survey; migrant; probability; measurement error; impact of remittances; effect of remittances; maximum likelihood estimation; statistics; supply equation; random variable; diaspora; remittance flows; amount of remittances; migrant remittances; determinants of remittances; standard errors; remittance data; dummy variable; dummy variables; normal density; demand for remittances; remittance-receiving households; remitter; maximum likelihood estimator; statistic; flow of remittances; cumulative distribution function; representative sample; migrants ? remittances; remittances data; effects of remittances; regression analysis; remitters; money transfers; data on remittances; impact of remittances on labor supply; effect of remittances on labor force participation; statistical service; econometrics; impact of remittance; nonlinearity; increase in remittances; impact of remittances on children; random variables; annual remittances; exponential distribution; integral; impacts of remittances; errors in variables; coefficient on remittances;

This paper has been announced in the following NEP Reports:

References

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  1. Alberto Alesina & Paola Giuliano, 2007. "The Power of the Family," NBER Working Papers 13051, National Bureau of Economic Research, Inc.
  2. Osili, Una Okonkwo, 2007. "Remittances and savings from international migration: Theory and evidence using a matched sample," Journal of Development Economics, Elsevier, vol. 83(2), pages 446-465, July.
  3. Pablo Acosta & Cesar Calderón & Pablo Fajnzylber & Humberto López, 2006. "Remittances and Development in Latin America," The World Economy, Wiley Blackwell, vol. 29(7), pages 957-987, 07.
  4. Dalen, H.P. van & Groenewold, G. & Fokkema, T., 2005. "Remittances and their effect on emigration intentions in Egypt, Morocco, and Turkey," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3107483, Tilburg University.
  5. Acosta, Pablo, 2006. "Labor supply, school attendance, and remittances from international migration : the case of El Salvador," Policy Research Working Paper Series 3903, The World Bank.
  6. White, Halbert, 1982. "Maximum Likelihood Estimation of Misspecified Models," Econometrica, Econometric Society, vol. 50(1), pages 1-25, January.
  7. Funkhouser, Edward, 1992. "Migration from Nicaragua: some recent evidence," World Development, Elsevier, vol. 20(8), pages 1209-1218, August.
  8. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
  9. Mariano Sana & Douglas S. Massey, 2005. "Household Composition, Family Migration, and Community Context: Migrant Remittances in Four Countries," Social Science Quarterly, Southwestern Social Science Association, vol. 86(2), pages 509-528.
  10. Woodruff, Christopher & Zenteno, Rene, 2007. "Migration networks and microenterprises in Mexico," Journal of Development Economics, Elsevier, vol. 82(2), pages 509-528, March.
  11. Freund, Caroline & Spatafora, Nikola, 2008. "Remittances, transaction costs, and informality," Journal of Development Economics, Elsevier, vol. 86(2), pages 356-366, June.
  12. Catalina Amuedo-Dorantes & Susan Pozo, 2006. "Migration, Remittances, and Male and Female Employment Patterns," American Economic Review, American Economic Association, vol. 96(2), pages 222-226, May.
  13. Goldfarb, Robert & Havrylyshyn, Oli & Mangum, Stephen, 1984. "Can remittances compensate for manpower outflows : The case of Philippine physicians," Journal of Development Economics, Elsevier, vol. 15(1-3), pages 1-17.
  14. Bauer, Thomas K. & Zimmermann, Klaus F., 1999. "Report No. 3: Assessment of Possible Migration Pressure and its Labour Market Impact Following EU Enlargement to Central and Eastern Europe," IZA Research Reports 3, Institute for the Study of Labor (IZA).
  15. Stapleton, David C & Young, Douglas J, 1984. "Censored Normal Regression with Measurement Error on the Dependent Variable," Econometrica, Econometric Society, vol. 52(3), pages 737-60, May.
  16. Tigran A. Melkonyan & David A. Grigorian, 2008. "Microeconomic Implications of Remittances in an Overlapping Generations Model with Altruism and Self-Interest," IMF Working Papers 08/19, International Monetary Fund.
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