Why Remit? The Case of Nicaragua

George Naufal

No 3276, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In the last two decades remittances have gained interest due to their large size. For several developing countries remittances constitute a large portion of their GDP and sometimes exceed FDI. While FDIs are usually profit driven, it is not clear what the driving force behind remittances is. This paper presents a simple theoretical model of migrants' remitting behavior. I consider two general motivations for remitting: altruism and self-interest. Using a heteroskedastic Tobit with a known form of variance I test the findings of the theoretical model with data from Nicaragua. Evidence suggests that migrants from Nicaragua remit for altruistic reasons. Moreover some gender heterogeneity seems to exist in the remitting behavior.

Keywords: altruism; censored regression; remittances; Central America; Nicaragua (search for similar items in EconPapers)
JEL-codes: D64 J61 O15 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2008-01
New Economics Papers: this item is included in nep-dev and nep-mig
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://docs.iza.org/dp3276.pdf (application/pdf)

Related works:
Working Paper: Who Remits? The Case of Nicaragua (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp3276

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().