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Selection Policy and Immigrants' Remittance Behaviour

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Author Info

  • Mahuteau, Stéphane

    () (NILS, Flinders University)

  • Piracha, Matloob

    () (University of Kent)

  • Tani, Massimiliano

    () (Macquarie University, Sydney)

Abstract

This paper analyses the impact of a change in Australia's immigration policy, introduced in the mid-1990s, on migrants' remittance behaviour. More precisely, we compare the remittance behaviour of two cohorts who entered Australia before and after the policy change, which consists of stricter entry requirements. The results indicate that those who entered under more stringent conditions – the second cohort – have a lower probability to remit but, if remitting, they tend to remit, on average, a higher amount than those in the first cohort. We also find significant time and region effects. Contrary to some existing evidence, time spent in Australia positively affects the probability to remit while in terms of regional effects, South Asians remit the highest amount. We discuss intuitions for the results in the paper.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4874.

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Length: 39 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:iza:izadps:dp4874

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Keywords: remittances; immigration; selection policy;

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References

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  1. Mahuteau, Stéphane & Junankar, Pramod N. (Raja), 2008. "Do Migrants Get Good Jobs in Australia? The Role of Ethnic Networks in Job Search," IZA Discussion Papers 3489, Institute for the Study of Labor (IZA).
  2. Matloob Piracha & Yu Zhu, 2008. "Precautionary Savings by Natives and Immigrants in Germany," Studies in Economics 0821, Department of Economics, University of Kent.
  3. Leung, S.F. & Yu, S., 1996. "Collinearity and Two-Step Estimation of Sample Selection Models: Problems, Origins and Remedies," RCER Working Papers 419, University of Rochester - Center for Economic Research (RCER).
  4. Dustmann, Christian, 1996. "Temporary Migration, Human Capital, and Language Fluency of Migrants," CEPR Discussion Papers 1376, C.E.P.R. Discussion Papers.
  5. Manning, W. G. & Duan, N. & Rogers, W. H., 1987. "Monte Carlo evidence on the choice between sample selection and two-part models," Journal of Econometrics, Elsevier, vol. 35(1), pages 59-82, May.
  6. Cobb-Clark, Deborah A, 2000. "Do Selection Criteria Make a Difference? Visa Category and the Labour Market Status of Immigrants to Australia," The Economic Record, The Economic Society of Australia, vol. 76(232), pages 15-31, March.
  7. Cobb-Clark, Deborah A., 2004. "Selection Policy and the Labour Market Outcomes of New Immigrants," IZA Discussion Papers 1380, Institute for the Study of Labor (IZA).
  8. Piracha, Matloob & Vadean, Florin, 2009. "Return Migration and Occupational Choice," IZA Discussion Papers 3922, Institute for the Study of Labor (IZA).
  9. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  10. Catalina Amuedo-Dorantes & Susan Pozo, 2006. "Remittances as insurance: evidence from Mexican immigrants," Journal of Population Economics, Springer, vol. 19(2), pages 227-254, June.
  11. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
  12. Blundell, Richard William & Meghir, Costas, 1985. "Selection Criteria for a Microeconometric Model of Labour Supply," CEPR Discussion Papers 57, C.E.P.R. Discussion Papers.
  13. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-44, September.
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Cited by:
  1. Collier, William & Piracha, Matloob & Randazzo, Teresa, 2011. "Remittances and Return Migration," IZA Discussion Papers 6091, Institute for the Study of Labor (IZA).

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