Migrant wages, remittances and recipient labour supply in a moral hazard model

Claire Naiditch and Radu Vranceanu

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Abstract: This paper analyzes the interaction between migrants income and remittances and between remittancesand the labor supply of residents. The model is cast as a two-period game with imperfect informationabout the residents' real economic situation. Residents subject to a good economic situation may behave as if they were in a poor economic situation only in order to manipulate remitters' expectations. The latter, being aware of this risk, reduce the remitted amount accordingly. Therefore, in the equilibrium, residents who really are victims of the bad economic outlook, are penalized as compared to the perfect information set-up. In some circumstances, they can signal their type by drastically cutting working hours, thus further enhancing their precarity right when their economic situation is the worst.

Keywords: Migrants; Remittances; Perfect Bayesian Equilibrium; Labour Supply; Signaling; Altruism (search for similar items in EconPapers)
Date: 2009-03
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00318870
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Citations: View citations in EconPapers (10)

Published in Economic Systems, 2009, 33 (1), pp.60-82. ⟨10.1016/j.ecosys.2008.07.003⟩

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Related works:
Journal Article: Migrant wages, remittances and recipient labour supply in a moral hazard model (2009)
Working Paper: Migrant wages, remittances and recipient labour supply in a moral hazard model (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00318870

DOI: 10.1016/j.ecosys.2008.07.003

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