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Migratory Equilibria with Invested Remittances

Author

Listed:
  • Claire Naiditch

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

  • Radu Vranceanu

    () (Economics Department - Essec Business School)

Abstract

This paper analyzes international migrations when migrants invest part of their income in their origin country. This investment contributes to increase capital intensity and wages in the origin country, thus reducing the scope for migrating. We show that a non-total migratory equilibrium can exist if the foreign wage is not too high, and/or migratory and transfer costs are not too low. Exogenous shocks, such as an increase in the foreign wage, lead to an increase in optimal remittances per migrant, and a higher wage in the origin country. Yet the net effect on the equilibrium number of migrants is positive. Hence, in equilibrium, optimal remittances and number of migrants are positively related. We use data from twenty fi ve countries from Eastern Europe and Central Asia in 2000 in order to test for this implication of our model. OLS and bootstrap estimates put forward a positive elasticity of the number of migrants with respect to remittances per migrant. Policy implications follow.

Suggested Citation

  • Claire Naiditch & Radu Vranceanu, 2009. "Migratory Equilibria with Invested Remittances," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00376472, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00376472
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00376472
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    References listed on IDEAS

    as
    1. Stark, Oded & Wang, You Qiang, 2002. "Migration dynamics," Economics Letters, Elsevier, vol. 76(2), pages 159-164, July.
    2. Ralitza Dimova & François-Charles Wolff, 2015. "Remittances and Chain Migration: Longitudinal Evidence from Bosnia and Herzegovina," Journal of Development Studies, Taylor & Francis Journals, vol. 51(5), pages 554-568, May.
    3. Riccardo Faini, 2007. "Remittances and the Brain Drain: Do More Skilled Migrants Remit More?," World Bank Economic Review, World Bank Group, vol. 21(2), pages 177-191, May.
    4. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
    5. Jean-Paul Azam & Flore Gubert, 2005. "Those in Kayes. The Impact of Remittances on Their Recipients in Africa," Revue économique, Presses de Sciences-Po, vol. 56(6), pages 1331-1358.
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    7. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
    8. Faini, Riccardo, 2006. "Remittances and the Brain Drain," IZA Discussion Papers 2155, Institute for the Study of Labor (IZA).
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    10. 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.
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    Cited by:

    1. Naiditch, Claire & Vranceanu, Radu, 2010. "Equilibrium migration with invested remittances: The EECA evidence," European Journal of Political Economy, Elsevier, vol. 26(4), pages 454-474, December.

    More about this item

    Keywords

    Migratory Policy; Remittances; Investment motive; Migratory Policy.;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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