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Migrant wages, remittances and recipient labour supply in a moral hazard model

  • Claire Naiditch

    ()

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)

  • Radu Vranceanu

    ()

    (Economics Department - Essec Business School)

This paper analyzes the interaction between migrants income and remittances and between remittancesand the labor supply of residents. The model is cast as a two-period game with imperfect informationabout the residents' real economic situation. Residents subject to a good economic situation may behave as if they were in a poor economic situation only in order to manipulate remitters' expectations. The latter, being aware of this risk, reduce the remitted amount accordingly. Therefore, in the equilibrium, residents who really are victims of the bad economic outlook, are penalized as compared to the perfect information set-up. In some circumstances, they can signal their type by drastically cutting working hours, thus further enhancing their precarity right when their economic situation is the worst.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00318870.

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Date of creation: Mar 2009
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Handle: RePEc:hal:cesptp:halshs-00318870
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  1. Jean-Paul Azam & Flore Gubert, 2002. "Those in Kayes. The impact of remittances on their recipients in Africa," Working Papers DT/2002/11, DIAL (Développement, Institutions et Mondialisation).
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  15. Adams, Richard H. Jr., 2004. "Remittances and poverty in Guatemala," Policy Research Working Paper Series 3418, The World Bank.
  16. Besancenot, Damien & Vranceanu, Radu, 2005. "Socially Efficient Managerial Dishonesty," ESSEC Working Papers DR 05005, ESSEC Research Center, ESSEC Business School.
  17. Hoddinott, John, 1994. "A Model of Migration and Remittances Applied to Western Kenya," Oxford Economic Papers, Oxford University Press, vol. 46(3), pages 459-76, July.
  18. Adams, Richard Jr. & Page, John, 2005. "Do international migration and remittances reduce poverty in developing countries?," World Development, Elsevier, vol. 33(10), pages 1645-1669, October.
  19. Edgard R. Rodriguez & Susan Horton, 1995. "International Return Migration and Remittances in the Philippines," Working Papers horton-95-01, University of Toronto, Department of Economics.
  20. Adams, Richard H. Jr., 2006. "Remittances and poverty in Ghana," Policy Research Working Paper Series 3838, The World Bank.
  21. Stephen Drinkwater & Paul Levine & Emanuela Lotti, 2006. "Labour Market and Investment Effects of Remittances," School of Economics Discussion Papers 1906, School of Economics, University of Surrey.
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