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Remittances and Migration Intentions of the Left-Behind

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Author Info

  • Piracha, Matloob

    ()
    (University of Kent)

  • Saraogi, Amrita

    ()
    (Bunge Ltd)

Abstract

Migration and the consequent flow of remittances are like a double-edged sword; while keeping many out of poverty, they can also result in further brain drain and demographic imbalance for the country. Using a large household survey data from Moldova and employing simultaneous equations model we show that there exists a dual causality between receipt of remittances by non-migrants and their migration intentions. Moreover, we add a novel element to the empirical literature by being the first to be able to specify the mechanism behind the link between remittances and migration. We find evidence that remittances not only relieve credit constraints in the home country but also act as a signalling device of success in the host country. These results provide a fresh outlook on the role of remittances in shaping migration flows in the migrant sending countries.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7779.

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Length: 41 pages
Date of creation: Nov 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7779

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Related research

Keywords: migration intentions; remittances; simultaneity; Moldova;

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References

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  1. Stark, Oded & Wang, You Qiang, 2002. "Migration Dynamics," Economics Series 112, Institute for Advanced Studies.
  2. Christian Dustmann, 2003. "Children and return migration," Journal of Population Economics, Springer, vol. 16(4), pages 815-830, November.
  3. 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.
  4. Dalen, H.P. van & Henkens, K., 2008. "Emigration Intentions: Mere Words or True Plans? Explaining International Migration Intentions and Behavior," Discussion Paper 2008-60, Tilburg University, Center for Economic Research.
  5. 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.
  6. Dustmann, Christian & Mestres, Josep, 2010. "Remittances and temporary migration," Journal of Development Economics, Elsevier, vol. 92(1), pages 62-70, May.
  7. Xiushi Yang, 2000. "Determinants of migration intentions in Hubei province, China: individual versus family migration," Environment and Planning A, Pion Ltd, London, vol. 32(5), pages 769-787, May.
  8. Alejandra Cox Edwards & Manuelita Ureta, 2003. "International Migration, Remittances, and Schooling: Evidence from El Salvador," NBER Working Papers 9766, National Bureau of Economic Research, Inc.
  9. Hendrik P. van Dalen & George Groenewold & Jeanette J. Schoorl, 2003. "Out of Africa: What drives the Pressure to emigrate?," Tinbergen Institute Discussion Papers 03-059/3, Tinbergen Institute.
  10. Ilahi, Nadeem & Jafarey, Saqib, 1999. "Guestworker migration, remittances and the extended family: evidence from Pakistan," Journal of Development Economics, Elsevier, vol. 58(2), pages 485-512, April.
  11. Dimova, Ralitza & Wolff, Fran├žois-Charles, 2009. "Remittances and Chain Migration: Longitudinal Evidence from Bosnia and Herzegovina," IZA Discussion Papers 4083, Institute for the Study of Labor (IZA).
  12. Thomas Liebig & Alfonso Sousa-Poza, 2004. "Migration, Self-Selection and Income Inequality: An International Analysis," Kyklos, Wiley Blackwell, vol. 57(1), pages 125-146, 02.
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