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Steady streams and sudden bursts: persistence patterns in remittance decisions

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  • Giulia Bettin

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  • Riccardo Lucchetti

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Abstract

This paper is the first systematic attempt to investigate the factors affecting time persistence in individual remittance behaviour. By using micro-level longitudinal data from the German Socio-Economic Panel (SOEP), we apply a wide variety of discrete choice static and dynamic panel models to analyse the decision to remit. Our results provide evidence in favour of an intertemporal strategy. The persistence in remittance decisions is significantly influenced by “true state dependence”: migrants that remitted in the previous year have a significantly higher propensity to remit this year as well. We also show that remittance time patterns depend on both observable and unobservable individual socioeconomic characteristics, and in particular, that the household’s transnational composition plays an important role in determining remittance behaviour. Copyright Springer-Verlag Berlin Heidelberg 2016

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  • Giulia Bettin & Riccardo Lucchetti, 2016. "Steady streams and sudden bursts: persistence patterns in remittance decisions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(1), pages 263-292, January.
  • Handle: RePEc:spr:jopoec:v:29:y:2016:i:1:p:263-292
    DOI: 10.1007/s00148-015-0565-9
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    Cited by:

    1. Giulia Bettin & Riccardo Lucchetti & Claudia Pigini, 2016. "State dependence and unobserved heterogeneity in a double hurdle model for remittances: evidence from immigrants to Germany," Mo.Fi.R. Working Papers 127, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    2. repec:jss:jstsof:v:079:i08 is not listed on IDEAS
    3. Pigini, Claudia & Presbitero, Andrea F. & Zazzaro, Alberto, 2016. "State dependence in access to credit," Journal of Financial Stability, Elsevier, vol. 27(C), pages 17-34.
    4. Lucchetti, Riccardo & Pigini, Claudia, 2017. "DPB: Dynamic Panel Binary Data Models in gretl," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 79(i08).
    5. Francesco Bartolucci & Claudia Pigini, 2017. "Granger causality in dynamic binary short panel data models," Working Papers 421, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

    More about this item

    Keywords

    Migration; Remittances; Persistence; State dependence; Discrete panel data models; F22; F24; C23; C25;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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