Remittances and subjective welfare in a mixed-motives model: Evidence from Fiji

Jimenez, Eliana V. and Brown, Richard P. C. (2008). Remittances and subjective welfare in a mixed-motives model: Evidence from Fiji. Discussion Paper Series Discussion Paper No. 370, School of Economics, The University of Queensland.

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Author Jimenez, Eliana V.
Brown, Richard P. C.
Title Remittances and subjective welfare in a mixed-motives model: Evidence from Fiji
School, Department or Centre School of Economics
Institution The University of Queensland
Series Discussion Paper Series
Report Number Discussion Paper No. 370
Publication date 2008-06
Publisher The University of Queensland, School of Economics
Start page 1
End page 24
Total pages 24
Language eng
Subject 340210 Welfare Economics
1402 Applied Economics
Abstract/Summary To analyze migrants’ remittance motivations we extend the mixed-motives model of private transfers developed by Cox et al (2004), incorporating subjectively-assessed recipient welfare. We test the model with customized survey data from Fiji, finding evidence supportive of altruism for households below a subjective threshold level, indicating that international migrants’ remittances provide important social protection coverage to households where formal social protection systems are lacking.Unlike previous studies, we also find a positive, exchange-motivated relationship for those above the threshold. The conventional linear model applied to the same sample uncovers neither relationship. We conclude that either crowding-out or crowding-in of remittances can occur when recipients’ welfare improves, depending on the household’s pre-transfer welfare level. The net effects of recipients’ welfare improvements on remittances, and the effects of remittances on poverty alleviation and income distribution, are consequently more complex and ambiguous than previous studies suggest.
Keyword Remittances
Private transfers
Altruism
Exchange
Subjective welfare
Social protection
Fiji
Additional Notes JEL classification: H55; I30; J14; O15; O16.

 
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Created: Mon, 16 Jun 2008, 10:16:00 EST by Belinda Weaver on behalf of Faculty Of Health Sciences