TITLE:
Familial Relationship of Migrants and Remittances Behavior: Theory and Evidence from Ecuador
AUTHORS:
Hilcías E. Morán
KEYWORDS:
Remittances; Migration; Private Transfers; Altruism; Ecuador
JOURNAL NAME:
Modern Economy,
Vol.4 No.8,
August
9,
2013
ABSTRACT: This paper develops a simple analytical
model with altruistically motivated remittances to analyze the determinants of
remittances using household data from Ecuador. The model predicts that migrant
remittance behavior and household migration size are non-monotonically
correlated. The empirical work suggests that migrant remittances are a non-increasing
function of the number of migrants within the household. If there is a positive
selection of migrants, then one would expect that the forgone household income
due to migration is higher than when there is a negative selection. According
to the Ecuadorian data of households with at least 1 migrant, prior to
migration the individuals who left had a higher education level than those
relatives left behind. The average years of schooling of the migrants are 3.5
years, higher than the non-migrants. It seems that when migration size
changes from 2 to 3 and from 3 to 4 migrants within the same household, the
forgone household income due to migration might have a positive effect on
altruistically motivated remittances, which compensates for the negative effect
of the increased number of migrants on the individual amount of remittances
(Nash assumption). The results of allowing a non-linear relationship between
migrant remittance behavior and household migration are partially distinguished
from those reached when there is a linear relationship and also contrast with
the predictions of rent-seeking literature. Moreover, it shows that Ecuadorian
migrants who moved to Spain were less likely to remit and remit less than those
migrants whose destination country was the United States.