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Why Remit? The Case of Nicaragua

Author

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  • Naufal, George S

    (Texas A&M University)

Abstract

In the last two decades remittances have gained interest due to their large size. For several developing countries remittances constitute a large portion of their GDP and sometimes exceed FDI. While FDIs are usually profit driven, it is not clear what the driving force behind remittances is. This paper presents a simple theoretical model of migrants' remitting behavior. I consider two general motivations for remitting: altruism and self-interest. Using a heteroskedastic Tobit with a known form of variance I test the findings of the theoretical model with data from Nicaragua. Evidence suggests that migrants from Nicaragua remit for altruistic reasons. Moreover some gender heterogeneity seems to exist in the remitting behavior.

Suggested Citation

  • Naufal, George S, 2008. "Why Remit? The Case of Nicaragua," IZA Discussion Papers 3276, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp3276
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    Cited by:

    1. Bettin, Giulia & Lucchetti, Riccardo & Zazzaro, Alberto, 2012. "Endogeneity and sample selection in a model for remittances," Journal of Development Economics, Elsevier, vol. 99(2), pages 370-384.
    2. Yaw Nyarko, 2014. "The Returns to the Brain Drain and Brain Circulation in Sub-Saharan Africa: Some Computations Using Data from Ghana," NBER Chapters, in: African Successes, Volume II: Human Capital, pages 305-345, National Bureau of Economic Research, Inc.
    3. Andrew W. Hobbs & Kenneth P. Jameson, 2012. "Measuring the effect of bi-directional migration remittances on poverty and inequality in Nicaragua," Applied Economics, Taylor & Francis Journals, vol. 44(19), pages 2451-2460, July.
    4. Gao, Lili & Chen, Lihui & Wang, Dianshuang, 2024. "Human Capital, Migration and Remittance in Developing Countries: A General Equilibrium Approach," Asian Journal of Agricultural Extension, Economics & Sociology, Asian Journal of Agricultural Extension, Economics & Sociology, vol. 42(1), pages 1-9.
    5. repec:nbr:nberch:13368 is not listed on IDEAS
    6. Mónika López-Anuarbe & Maria Amparo Cruz-Saco & Yongjin Park, 2016. "More than Altruism: Cultural Norms and Remittances Among Hispanics in the USA," Journal of International Migration and Integration, Springer, vol. 17(2), pages 539-567, May.
    7. Giulia Bettin & Riccardo Lucchetti & Alberto Zazzaro, 2009. "Income, consumption and remittances: evidence from immigrants to Australia," Mo.Fi.R. Working Papers 34, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    8. Simon Davies, 2011. "What Motivates Gifts? Intra-Family Transfers in Rural Malawi," Journal of Family and Economic Issues, Springer, vol. 32(3), pages 473-492, September.
    9. Maria Amparo Cruz-Saco & Mónika López-Anuarbe, 2013. "Familism and Social Inclusion: Hispanics in New London, Connecticut," Social Inclusion, Cogitatio Press, vol. 1(2), pages 113-125.
    10. Farai Jena, 2016. "The remittance behaviour of Kenyan sibling migrants," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-19, December.

    More about this item

    Keywords

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    JEL classification:

    • 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
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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