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Determinants of Savings and Remittances: Empirical Evidence from Immigrants to Germany

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  • Sinning, Mathias

    (Australian National University)

Abstract

This paper investigates the determinants of migrants' financial transfers to their home country using German data. A double-hurdle model is applied to analyze the determinants of the propensity to send transfers abroad and the amount of transfers. The findings reveal that return intentions positively affect financial transfers of immigrants to their home country. Moreover, while the effect of the household size on migrants' transfers abroad turns out to be significantly negative, remittances are higher if close relatives live in the sending country. Finally, Vuong-tests indicate that the double-hurdle model is the correct specification for the analysis of migrants' savings and remittances rather than the conventional Tobit model usually applied in the literature.

Suggested Citation

  • Sinning, Mathias, 2007. "Determinants of Savings and Remittances: Empirical Evidence from Immigrants to Germany," IZA Discussion Papers 2966, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2966
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    More about this item

    Keywords

    international migration; savings; remittances; double-hurdle model;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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