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Remittances as investment in the absence of altruism

  • González-König, Gabriel
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    In the absence of altruism, there is no obvious reason why a migrant should remit part of his income to his family for investment at the home location. If the family invests such income (in housing for example), why would they give it back to the migrant when he returns? This paper is based on the idea that certain people at a migrant's home location may punish those families who do not return those investments in order to prevent their own possibilities of receiving future remittances and investments from being adversely affected. We find that in equilibrium we can have remittances to be invested and given back to the migrant and remittances for private consumption by the migrant's family even in the complete absence of altruism on either the part of the migrant or his family.

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    File URL: http://econstor.eu/bitstream/10419/39480/1/512933901.pdf
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    Paper provided by ZEI - Center for European Integration Studies, University of Bonn in its series ZEI Working Papers with number B 08-2005.

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    Date of creation: 2005
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    Handle: RePEc:zbw:zeiwps:b082005
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    Web page: http://www.zei.de/

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    1. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-93, Nov.-Dec..
    2. Kandel, E. & Lazear, E.P., 1990. "Peer Pressure and Partnerships," Papers 90-07, Rochester, Business - Managerial Economics Research Center.
    3. Stark, Oded, 1989. "Altruism and the Quality of Life," American Economic Review, American Economic Association, vol. 79(2), pages 86-90, May.
    4. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
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