Subjectively-assessed Welfare and International Remittances: Evidence from Tonga
Using data from a customised household survey in Tonga we assess the responsiveness of migrants' remittances to perceived needs of recipients. We extend a mixed-motives model, incorporating subjectively-assessed recipient welfare. We find evidence supportive of altruism for households below a subjective threshold, implying that remittances provide important social protection for the poor. We also find a positive relationship for those above the threshold implying that welfare improvements in migrant-sending countries could increase or decrease remittance flows depending on pre-transfer welfare level. The effects of remittances on poverty alleviation and income distribution are hence more complex and ambiguous than previous studies suggest.
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Volume (Year): 47 (2011)
Issue (Month): 6 ()
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