Migratory equilibria with invested remittances

Claire Naiditch and Radu Vranceanu

No DR 09002, ESSEC Working Papers from ESSEC Research Center, ESSEC Business School

Abstract: This paper analyzes international migrations when migrants invest part of their income in their origin country. This investment contributes to increase capital intensity and wages in the origin country, thus reducing the scope for migrating. We show that a non-total migratory equilibrium can exist if the foreign wage is not too high, and/or migratory and transfer costs are not too low. Exogenous shocks, such as an increase in the foreign wage, lead to an increase in optimal remittances per migrant, and a higher wage in the origin country. Yet the net effect on the equilibrium number of migrants is positive. Hence, in equilibrium, optimal remittances and number of migrants are positively related. We use data from twenty five countries from Eastern Europe and Central Asia in 2000 in order to test for this implication of our model. OLS and bootstrap estimates put forward a positive elasticity of the number of migrants with respect to remittances per migrant. Policy implications follow.

Keywords: Investment motive; Migration; Migratory policy; Remittances (search for similar items in EconPapers)
JEL-codes: F22 F24 J61 O15 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2009-04
New Economics Papers: this item is included in nep-mig
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Migratory Equilibria with Invested Remittances (2009)
Working Paper: Migratory equilibria with invested remittances (2009)
Working Paper: Migratory Equilibria with Invested Remittances (2009)
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