UC Davis Agricultural and Resource Economics

Heng Zhu, University of California, Davis

Practice Job Talk: Strategic remittances by migrants

Date and Location

Tuesday, November 13, 2018, 4:10 PM - 5:30 PM

Abstract

The impact of remittances on recipient households is a widely researched topic in the migration literature, often uncovering mixed or even contradictory results. One peculiar observation in remittance research is that many migrants send money frequently, a pattern that can be very costly since the majority of Money Transfer Operators (MTOs) charge a fixed fee for each transaction. Previous studies on this topic focus on the volume of money that migrants send in a given timeframe, paying less attention to the frequency and timing. Given that remittances act as the financial tie between migrant and household, it should be acknowledged that remittance flows and patterns reflect the circumstances of the migrant and the receiving household. This paper explores the role of remittance patterns within an intra household setting, focusing on why migrants may choose to adopt a certain form of remittance transfer over other alternatives. An intra-household model of remittance behavior is solved using numerical simulation. The model demonstrates how varying forms of remittance transfers are driven by migrant circumstances and household needs. Hypotheses from the model are tested using a unique data set which collected information on both the migrant and their recipient households.

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