Why Remit? The Case of Nicaragua
AbstractIn the last two decades remittances have gained interest due to their large size. For several developing countries remittances constitute a large portion of their GDP and sometimes exceed FDI. While FDIs are usually profit driven, it is not clear what the driving force behind remittances is. This paper presents a simple theoretical model of migrants' remitting behavior. I consider two general motivations for remitting: altruism and self-interest. Using a heteroskedastic Tobit with a known form of variance I test the findings of the theoretical model with data from Nicaragua. Evidence suggests that migrants from Nicaragua remit for altruistic reasons. Moreover some gender heterogeneity seems to exist in the remitting behavior.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3276.
Length: 46 pages
Date of creation: Jan 2008
Date of revision:
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Other versions of this item:
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-02 (All new papers)
- NEP-DEV-2008-02-02 (Development)
- NEP-MIG-2008-02-02 (Economics of Human Migration)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Mo.Fi.R. Working Papers
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