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Do migrants send remittances as a way of self-insurance?

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  • Catia Batista
  • Janis Umblijs

Abstract

How do risk preferences affect migrant remittance behaviour? Examination of this relationship has only begun to be explored. Using a tailored representative survey of 1500 immigrants in the Greater Dublin Area, Ireland, we find a positive and significant relationship between risk aversion and migrant remittances. Risk-averse individuals are more likely to send remittances home and are, on average, likely to remit a higher amount, after controlling for a broad range of individual and group characteristics. The evidence we obtain is consistent with a “purchase of self-insurance” motive to remit in that we also find support for more remittances being sent by risk-averse immigrants who face higher wage risks and to individuals with more financial resources.

Suggested Citation

  • Catia Batista & Janis Umblijs, 2014. "Do migrants send remittances as a way of self-insurance?," NOVAFRICA Working Paper Series wp1402, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
  • Handle: RePEc:unl:novafr:wp1402
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    Cited by:

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    2. Chabé-Ferret, Bastien & Machado, Joël & Wahba, Jackline, 2018. "Remigration intentions and migrants' behavior," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 56-72.
    3. Catia Batista & Gaia Narciso, 2018. "Migrant Remittances and Information Flows: Evidence from a Field Experiment," The World Bank Economic Review, World Bank Group, vol. 32(1), pages 203-219.
    4. Bastien Chabé-Ferret & Joël Machado & Jackline Wahba, 2016. "Return Plans and Migrants' Behavior," LIDAM Discussion Papers IRES 2016016, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    5. Christian Dustmann & Joseph-Simon Görlach, 2016. "The Economics of Temporary Migrations," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 98-136, March.
    6. Loxha Arbëresha, 2019. "Do Remittances reduce poverty in Kosovo? - A counterfactual analysis," South East European Journal of Economics and Business, Sciendo, vol. 14(2), pages 117-132, December.
    7. 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.
    8. Tommaso Frattini, 2017. "Integration of immigrants in host countries - what we know and what works," Development Working Papers 427, Centro Studi Luca d'Agliano, University of Milano.
    9. Bettin, Giulia & Lucchetti, Riccardo & Pigini, Claudia, 2018. "A dynamic double hurdle model for remittances: evidence from Germany," Economic Modelling, Elsevier, vol. 73(C), pages 365-377.
    10. Catia Batista & Ana Isabel Costa, 2016. "Assessing the role of social networks on migrant labor market outcomes: Evidence from a representative immigrant survey," NOVAFRICA Working Paper Series wp1601, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    11. Zhan, Crystal & Deole, Sumit, 2022. "Economic Preferences and the Self-selection of Immigrants," GLO Discussion Paper Series 1156, Global Labor Organization (GLO).
    12. Deole, Sumit S. & Rieger, Marc Oliver, 2022. "Immigrant-native gap in risk and time preferences in Germany: Levels, socio-economic determinants, and recent changes," GLO Discussion Paper Series 1055, Global Labor Organization (GLO).
    13. Nakamura, Nobuyuki & Suzuki, Aya, 2022. "How Altruism Works during a Pandemic: Examining the Roles of Financial Support and Degrees of Individual Altruism on International Remittance," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322073, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Migration; risk aversion; remittances; self-insurance;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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