Remittances, Banking Status and the Usage of Insurance Schemes

Dorothee Crayen, Christa Hainz and Christiane St�h de Mart�nez

Journal of Development Studies, 2013, vol. 49, issue 6, 861-875

Abstract: Empirical evidence that migrants send home more remittances after disasters raises the question of whether remittances are used to self-insure, substituting for both formal and informal insurance. We investigate this question using a unique data set on the usage patterns of financial services by households in South Africa. We show that the likelihood that a respondent has a formal funeral cover increases with income and banking status. However, it is lower for individuals receiving remittances, which supports the idea that remittances act as self-insurance. We also show that other risk management strategies influence the purchasing of formal funeral cover. Finally, we find that determinants of informal insurance differ from those of formal insurance.

Date: 2013
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Working Paper: Remittances, Banking Status and the Usage of Insurance Schemes (2012)
Working Paper: Remittances, Banking Status and the Usage of Insurance Schemes (2010)
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DOI: 10.1080/00220388.2013.777706

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