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A Model of Foreign-Born Transfers: Evidence from Canadian Micro Data

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  • DeVoretz, Don J.

    ()
    (Simon Fraser University)

  • Vadean, Florin

    ()
    (University of Kent)

Abstract

This paper models financial transfers outside the household for both the Canadian-born and foreign-born Canadian populations in a traditional expenditure framework. Using survey data we estimate transfer functions as part of a larger expenditure system and calculate Engel elasticities for remittances by both the Canadian and foreign-born populations. We conclude that transfers outside the household are a normal good for recent Asian immigrants and a luxury good for all other immigrants and Canadians. Immigrant transfers upon arrival are greater than Canadian-born transfers indicating a strong entry effect. Assimilation or convergence to the Canadian-born norm over time is however very slow. We also find evidence of negative foreign-born transfers as sending country households remit to Canadian immigrant households. Finally, all foreign-born groups generally consider remittances to charitable organizations a greater necessity than inter-household transfers.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1714.

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Length: 32 pages
Date of creation: Aug 2005
Date of revision:
Handle: RePEc:iza:izadps:dp1714

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Keywords: immigration; remittances;

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References

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  1. Shamsuddin, Abul F M & DeVoretz, Don J, 1998. "Wealth Accumulation of Canadian and Foreign-Born Households in Canada," Review of Income and Wealth, International Association for Research in Income and Wealth, International Association for Research in Income and Wealth, vol. 44(4), pages 515-33, December.
  2. Thomas Bauer & Mathias Sinning, 2005. "The Savings Behavior of Temporary and Permanent Migrants in Germany," RWI Discussion Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung 0029, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
  3. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 93(5), pages 901-18, October.
  4. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 95(3), pages 508-46, June.
  5. Adams, Richard H. Jr., 2005. "Remittances, household expenditure and investment in Guatemala," Policy Research Working Paper Series, The World Bank 3532, The World Bank.
  6. Dennis Ahlburg & Richard Brown, 1998. "Migrants' intentions to return home and capital transfers: A study of Tongans and Samoans in Australia," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 35(2), pages 125-151.
  7. Cox, Donald & Rank, Mark R, 1992. "Inter-vivos Transfers and Intergenerational Exchange," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 305-14, May.
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Cited by:
  1. Thomas K. Bauer & Mathias G. Sinning, 2009. "The Purpose of Remittances – Evidence from Germany," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0109, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Sinning, Mathias, 2007. "Determinants of Savings and Remittances: Empirical Evidence from Immigrants to Germany," IZA Discussion Papers 2966, Institute for the Study of Labor (IZA).
  3. DeVoretz, Don J., 2006. "A History of Canadian Recruitment of Highly Skilled Immigrants: Circa 1980-2001," IZA Discussion Papers 2197, Institute for the Study of Labor (IZA).

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