Why Remit? The Case of Bangladesh

Kazi Abdul, Mannan and Gin Kok, Wei (2008): Why Remit? The Case of Bangladesh. Published in: Asian Migration and Diaspora Studies , Vol. 13, No. 2 (15 December 2008): pp. 55-75.

Abstract

The literature on remittances has mostly focused on finding the determinants and impacts of remittances. In this paper, present a simple theoretical model of remittance behavior that consider remittances as unidirectional flows from the migrant in a host country to the original household in the home country. This study test the theoretical predictions of this model using survey data from Bangladesh and quantify the results of the heteroskedastic Tobit for policy purposes. The findings of the theoretical model define two proxies for the bad state outcome and find some empirical evidence supporting altruism as a main motivation behind remittances. The number of other migrants belonging to the same household seems to play a crucial role in determining the remittance behavior. It also test the gender heterogeneity of the remitting behavior and find supporting evidence that female migrants seem to behave more altruistically than their male counterparts. This study contributes to the remittances literature by investigating the reaction of remittances to a bad state outcome on the receiving household rather than on the migrant. Therefore sending countries’ governments can affect remittances per migrant by targeting potential migrants. These governments need to be aware of the existing trade-off between the number of migrants belonging to the same receiving household and remittances per migrant.

• Item Type: MPRA Paper
• Language: English
• Keywords: migration, remittances, motivations, households, Bangladesh
• Subjects: J - Labor and Demographic Economics > J0 - General; J - Labor and Demographic Economics > J0 - General > J00 - General; J - Labor and Demographic Economics > J0 - General > J01 - Labor Economics: General; J - Labor and Demographic Economics > J0 - General > J08 - Labor Economics Policies; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J61 - Geographic Labor Mobility ; Immigrant Workers; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J62 - Job, Occupational, and Intergenerational Mobility

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