IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Income, consumption and remittances: evidence from immigrants to Australia

  • Giulia Bettin

    ()

    (Hamburg Institute of International Economics (HWWI), Germany)

  • Riccardo Lucchetti

    ()

    (Universit… Politecnica delle Marche, Department of Economics)

  • Alberto Zazzaro

    ()

    (Universit… Politecnica delle Marche, MoFiR)

For many countries, remittance behaviour by migrants is an important component of their overall international financial flows. To date, the empirical literature has analysed the propensity to remit as a function of migrants' socio-economic characteristics. However, no studies have fully addressed the empirical implications of remittance behaviour being determined in the broader context of migrants' labour, income and consumption allocation strategy. On the contrary, the migrant's income has almost always been treated as exogenous in this context. The aim of this study is to estimate a remittance equation that detects the main determinants of remittance behaviour while addressing endogeneity and reverse causality relationships between remittances, income, consumption and savings. Moreover, since a large share of individuals do not remit money at all, an instrumental variable variant of the double-hurdle selection model is proposed and estimated by LIML.;A sending country perspective is adopted in the empirical analysis by considering the first cohort of the Longitudinal Survey of Immigrants to Australia. We find that endogeneity is substantial and that estimates obtained by the methods previously employed in the literature may be very misleading if given a behavioural interpretation. Our results confirm some theoretical predictions and shed light on others; notably, we show that "selfish" motives in remitters are at least as important as "altruistic" motives.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir034.pdf
File Function: First version, 2009
Download Restriction: no

Paper provided by Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences in its series Mo.Fi.R. Working Papers with number 34.

as
in new window

Length: 36
Date of creation: Nov 2009
Date of revision:
Handle: RePEc:anc:wmofir:34
Contact details of provider: Postal: Piazzale Martelli, 8 6012 Ancona
Phone: +39 071 220 7083
Fax: +39 071 220 7102
Web page: http://sites.google.com/site/mofirunivpm/
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Giulia Bettin & Alberto Zazzaro, 2009. "Remittances and Financial Development:;Substitutes or Complements in Economic Growth?," Mo.Fi.R. Working Papers 28, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  2. Merkle, Lucie & Zimmermann, Klaus F., 1992. "Savings, remittances, and return migration," Economics Letters, Elsevier, vol. 38(1), pages 77-81, January.
  3. Catrinescu, Natalia & Leon-Ledesma, Miguel & Piracha, Matloob & Quillin, Bryce, 2009. "Remittances, Institutions, and Economic Growth," World Development, Elsevier, vol. 37(1), pages 81-92, January.
  4. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
  5. Yasser Abdih & Jihad Dagher & Peter Montiel, 2010. "Remittances and Institutions: Are Remittances a Curse?," Center for Development Economics 2010-08, Department of Economics, Williams College.
  6. 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.
  7. Mathias Sinning, 2007. "Determinants of Savings and Remittances – Empirical Evidence from Immigrants to Germany," Ruhr Economic Papers 0023, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  8. White, Halbert, 1982. "Maximum Likelihood Estimation of Misspecified Models," Econometrica, Econometric Society, vol. 50(1), pages 1-25, January.
  9. Ken Clark & Stephen Drinkwater, 2007. "An Investigation Of Household Remittance Behaviour: Evidence From The United Kingdom," Manchester School, University of Manchester, vol. 75(6), pages 717-741, December.
  10. Funkhouser, Edward, 1995. "Remittances from International Migration: A Comparison of El Salvador and Nicaragua," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 137-46, February.
  11. Rui Esteves & David Khoudour-Castéras, 2009. "Remittances, Capital Flows and Financial Development during the Mass Migration Period, 1870-1913," Working Papers 2009-12, CEPII research center.
  12. Naufal, George S, 2008. "Why Remit? The Case of Nicaragua," IZA Discussion Papers 3276, Institute for the Study of Labor (IZA).
  13. Freund, Caroline & Spatafora, Nikola, 2005. "Remittances : transaction costs, determinants, and informal flows," Policy Research Working Paper Series 3704, The World Bank.
  14. 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.
  15. de la Briere, Benedicte & Sadoulet, Elisabeth & de Janvry, Alain & Lambert, Sylvie, 2002. "The roles of destination, gender, and household composition in explaining remittances: an analysis for the Dominican Sierra," Journal of Development Economics, Elsevier, vol. 68(2), pages 309-328, August.
  16. Ana Rute Cardoso & Elsa Fontainha & Chiara Monfardini, 2008. "Children and parents time use: Empirical evidence on investment in human capital in France, Italy and Germany," CHILD Working Papers wp17_08, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  17. Banerjee, Biswajit, 1984. "The probability, size and uses of remittances from urban to rural areas in India," Journal of Development Economics, Elsevier, vol. 16(3), pages 293-311, December.
  18. Albert Bollard & David McKenzie & Melanie Morten, 2009. "The Remitting Patterns of African Migrants in the OECD," CReAM Discussion Paper Series 0921, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  19. Jørgen Carling, 2008. "The determinants of migrant remittances," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 582-599, Autumn.
  20. Hatton, Timothy J. & Williamson, Jeffrey G., 1998. "The Age of Mass Migration: Causes and Economic Impact," OUP Catalogue, Oxford University Press, number 9780195116519, March.
  21. Cox, Donald & Eser, Zekeriya & Jimenez, Emmanuel, 1998. "Motives for private transfers over the life cycle: An analytical framework and evidence for Peru," Journal of Development Economics, Elsevier, vol. 55(1), pages 57-80, February.
  22. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-33, March.
  23. 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.
  24. Samir Jahjah & Ralph Chami & Connel Fullenkamp, 2003. "Are Immigrant Remittance Flows a Source of Capital for Development," IMF Working Papers 03/189, International Monetary Fund.
  25. Giulia Bettin & Riccardo Lucchetti, 2009. "Instrumental Variable Interval Regression," EHUCHAPS, Universidad del País Vasco - Facultad de Ciencias Económicas y Empresariales.
  26. Blundell, Richard & Ham, John & Meghir, Costas, 1987. "Unemployment and Female Labour Supply," Economic Journal, Royal Economic Society, vol. 97(388a), pages 44-64, Supplemen.
  27. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-18, October.
  28. repec:cup:cbooks:9780521898010 is not listed on IDEAS
  29. Papaioannou, Elias, 2009. "What drives international financial flows? Politics, institutions and other determinants," Journal of Development Economics, Elsevier, vol. 88(2), pages 269-281, March.
  30. Poirine, Bernard, 1997. "A theory of remittances as an implicit family loan arrangement," World Development, Elsevier, vol. 25(4), pages 589-611, January.
  31. HwaJung Choi, 2007. "Are Remittances Insurance? Evidence from Rainfall Shocks in the Philippines," World Bank Economic Review, World Bank Group, vol. 21(2), pages 219-248, May.
  32. Rapoport, Hillel & Docquier, Frédéric, 2005. "The Economics of Migrants’ Remittances," IZA Discussion Papers 1531, Institute for the Study of Labor (IZA).
  33. Hoddinott, John, 1992. "Modelling Remittance Flows in Kenya," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 1(2), pages 206-32, August.
  34. Jones, Andrew M, 1989. "A Double-Hurdle Model of Cigarette Consumption," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(1), pages 23-39, Jan.-Mar..
  35. Blundell, Richard & Smith, Richard J., 1994. "Coherency and estimation in simultaneous models with censored or qualitative dependent variables," Journal of Econometrics, Elsevier, vol. 64(1-2), pages 355-373.
  36. Brown, Richard P. C., 1997. "Estimating remittance functions for Pacific Island Migrants," World Development, Elsevier, vol. 25(4), pages 613-626, January.
  37. Niimi, Yoko & Ozden, Caglar, 2006. "Migration and remittances : causes and linkages," Policy Research Working Paper Series 4087, The World Bank.
  38. repec:cup:cbooks:9780521725200 is not listed on IDEAS
  39. Osili, Una Okonkwo, 2007. "Remittances and savings from international migration: Theory and evidence using a matched sample," Journal of Development Economics, Elsevier, vol. 83(2), pages 446-465, July.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:anc:wmofir:34. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maurizio Mariotti)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.