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Asymmetric Information and Remittances: Evidence from Matched Administrative Data

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  • Thomas Joseph
  • Yaw Nyarko
  • Shing-Yi Wang

Abstract

Using new large-scale, administrative data matching remittances and monthly payroll disbursals, we demonstrate how migrants' earnings in the United Arab Emirates affect their remittances. We consider several types of income changes: Ramadan, weather shocks, a labor reform and returns to time in the UAE. We demonstrate that two key characteristics of the income changes that affect the income elasticity of remittances are the observability of the income and whether the income change is positive or negative. The results are consistent with a private information model where remittances are viewed as payments in an income-sharing contract.

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  • Thomas Joseph & Yaw Nyarko & Shing-Yi Wang, 2018. "Asymmetric Information and Remittances: Evidence from Matched Administrative Data," American Economic Journal: Applied Economics, American Economic Association, vol. 10(2), pages 58-100, April.
    • Handle: RePEc:aea:aejapp:v:10:y:2018:i:2:p:58-100
    Note: DOI: 10.1257/app.20160150
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    Cited by:

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    2. Cuadros-Meñaca, Andres, 2020. "Remittances, health insurance, and pension contributions: Evidence from Colombia," World Development, Elsevier, vol. 127(C).
    3. Joachim De Weerdt & Garance Genicot & Alice Mesnard, 2019. "Asymmetry of Information within Family Networks," Journal of Human Resources, University of Wisconsin Press, vol. 54(1), pages 225-254.
    4. Costas Meghir & Ahmed Mushfiq Mobarak & Ahmed Corina Mommaerts & Ahmed Melanie Morten, 2019. "Migration and Informal Insurance," Cowles Foundation Discussion Papers 2185R, Cowles Foundation for Research in Economics, Yale University, revised Aug 2020.
    5. Theoharides, Caroline, 2020. "The unintended consequences of migration policy on origin-country labor market decisions," Journal of Development Economics, Elsevier, vol. 142(C).
    6. Clemens, Michael A., 2019. "Measuring the Spatial Misallocation of Labor: The Returns to India-Gulf Guest Work in a Natural Experiment," IZA Discussion Papers 12095, Institute of Labor Economics (IZA).
    7. Yalei Zhai & Hisaki Kono, 2021. "The poor receive less: Remittance behaviour of female migrants in Myanmar," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(5), pages 910-926, July.
    8. Suresh Naidu & Yaw Nyarko & Shing-Yi Wang, 2016. "Monopsony Power in Migrant Labor Markets: Evidence from the United Arab Emirates," Journal of Political Economy, University of Chicago Press, vol. 124(6), pages 1735-1792.
    9. Hou, Yulin & Jia, Shaomeng, 2023. "Do remittances react to commodity windfall? Evidence from Latin America and the Caribbean," Economic Modelling, Elsevier, vol. 121(C).
    10. Stefano Carattini & Marcella Veronesi, 2020. "Trust, Temperature Fluctuations, and Asylum Applications," Working Papers 17/2020, University of Verona, Department of Economics.
    11. Ur Rehman, Obeid, 2023. "Spousal communication and information sharing: Evidence from migrants and their spouses," Journal of Development Economics, Elsevier, vol. 165(C).
    12. Kate Ambler & Susan Godlonton, 2020. "Information Asymmetries and Remittance Recipient Income: A Field Experiment in Malawi," Department of Economics Working Papers 2020-12, Department of Economics, Williams College.
    13. Shrestha, Maheshwor, 2019. "Death scares: How potential work-migrants infer mortality rates from migrant deaths," Journal of Development Economics, Elsevier, vol. 141(C).
    14. De Arcangelis, Giuseppe & Fertig, Alexander & Liang, Yuna & Srouji, Peter & Yang, Dean, 2023. "Measuring remittances," Journal of Development Economics, Elsevier, vol. 161(C).

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    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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