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Remittances, Banking Status and the Usage of Insurance Schemes

  • Dorothee Crayen
  • Christa Hainz

    ()

  • Christiane Ströh de Martinez

Empirical evidence that migrants send home more remittances after disasters raises the question of whether remittances can be used to self-insure, substituting for both formal and informal insurance. We investigate this question using a unique data set on the usage patterns of financial services by households in South Africa. We show that the likelihood that a respondent has a formal funeral cover increases with income and banking status. However, it is lower for individuals receiving remittances, which supports the idea that remittances act as (self-) insurance. We also show that purchasing formal funeral cover is influenced by other risk management strategies and that determinants of informal insurance differ from those of formal insurance.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-07/cesifo1_wp3117.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3117.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3117
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  1. Azam, Jean-Paul & Gubert, Flore, 2006. "Migrants' Remittances and the Household in Africa: A Review of Evidence," Economics Papers from University Paris Dauphine 123456789/5126, Paris Dauphine University.
  2. Phillippe G. Leite & Terry McKinley & Rafael Guerreiro Osório, 2006. "The Post-Apartheid Evolution of Earnings Inequality in South Africa, 1995-2004," Working Papers 32, International Policy Centre for Inclusive Growth.
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  6. 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.
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  8. repec:idb:brikps:59678 is not listed on IDEAS
  9. Roth, Jimmy, 2000. "Informal micro-finance schemes : the case of funeral insurance in South Africa," ILO Working Papers 344891, International Labour Organization.
  10. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
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  12. Daryl Collins, 2005. "Financial instruments of the poor: Initial findings from the financial diaries study," SALDRU/CSSR Working Papers 130, Southern Africa Labour and Development Research Unit, University of Cape Town.
  13. Gubert, Flore, 2002. "Do Migrants Insure Those who Stay Behind? Evidence from the Kayes Area (Western Mali)," Economics Papers from University Paris Dauphine 123456789/10842, Paris Dauphine University.
  14. Hulme, David & Shepherd, Andrew, 2003. "Conceptualizing Chronic Poverty," World Development, Elsevier, vol. 31(3), pages 403-423, March.
  15. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 103-114, Summer.
  16. Pramila Crivelli & Jasmin Gröschl, 2012. "The Impact of Sanitary and Phytosanitary Measures on Market Entry and Trade Flows," Ifo Working Paper Series Ifo Working Paper No. 136, Ifo Institute for Economic Research at the University of Munich.
  17. 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.
  18. Mohapatra, Sanket & Joseph, George & Ratha, Dilip, 2009. "Remittances and natural disasters : ex-post response and contribution to ex-ante preparedness," Policy Research Working Paper Series 4972, The World Bank.
  19. Rees, Ray & Wambach, Achim, 2008. "The Microeconomics of Insurance," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(1–2), pages 1-163, February.
  20. Thankom Arun & Susan Steiner, 2008. "Micro-Insurance in the Context of Social Protection," Brooks World Poverty Institute Working Paper Series 5508, BWPI, The University of Manchester.
  21. Tigran A. Melkonyan & David A. Grigorian, 2008. "Microeconomic Implications of Remittances in an Overlapping Generations Model with Altruism and Self-Interest," IMF Working Papers 08/19, International Monetary Fund.
  22. Pablo Fajnzylber & J. Humberto López, 2008. "Remittances and Development : Lessons from Latin America," World Bank Publications, The World Bank, number 6911.
  23. Maurizio Bussolo & María Soledad Martínez Peria & César Calderón & Yira Mascaró & Mette E. Nielsen & Pablo Acosta & J. Humberto López & Çaglar Özden & Yoko Niimi & Luis Molina & Florencia Moizeszowicz, 2008. "Remittances and Development: Lessons from Latin America," IDB Publications (Books), Inter-American Development Bank, number 59678 edited by J. Humberto López & Pablo Fajnzylber.
  24. Daryl Collins, 2005. "Financial instruments of the poor: initial findings from the South African Financial Diaries study," Development Southern Africa, Taylor & Francis Journals, vol. 22(5), pages 717-728.
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