Remittances and Migration Intentions of the Left-Behind

Matloob Piracha and Amrita Saraogi

No 7779, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Migration and the consequent flow of remittances are like a double-edged sword; while keeping many out of poverty, they can also result in further brain drain and demographic imbalance for the country. Using a large household survey data from Moldova and employing simultaneous equations model we show that there exists a dual causality between receipt of remittances by non-migrants and their migration intentions. Moreover, we add a novel element to the empirical literature by being the first to be able to specify the mechanism behind the link between remittances and migration. We find evidence that remittances not only relieve credit constraints in the home country but also act as a signalling device of success in the host country. These results provide a fresh outlook on the role of remittances in shaping migration flows in the migrant sending countries.

Keywords: migration intentions; remittances; simultaneity; Moldova (search for similar items in EconPapers)
JEL-codes: F22 F24 J1 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013-11
New Economics Papers: this item is included in nep-dem, nep-int and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Forthcoming - published in: Migration and Development, 2016, 6(1), 102-122

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