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Steady streams and sudden bursts: persistence patterns in remittance decisions

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  • Giulia Bettin

    (Università Politecnica delle Marche)

  • Riccardo Lucchetti

    (Università Politecnica delle Marche)

Abstract

This paper is the first systematic attempt to investigate the factors affecting time persistence in individual remittance behaviour. By using micro-level longitudinal data from the German Socio-Economic Panel (SOEP), we apply a wide variety of discrete choice static and dynamic panel models to analyse the decision to remit. Our results provide evidence in favour of an intertemporal strategy. The persistence in remittance decisions is significantly influenced by “true state dependence”: migrants that remitted in the previous year have a significantly higher propensity to remit this year as well. We also show that remittance time patterns depend on both observable and unobservable individual socioeconomic characteristics, and in particular, that the household’s transnational composition plays an important role in determining remittance behaviour.

Suggested Citation

  • Giulia Bettin & Riccardo Lucchetti, 2016. "Steady streams and sudden bursts: persistence patterns in remittance decisions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(1), pages 263-292, January.
    • Handle: RePEc:spr:jopoec:v:29:y:2016:i:1:d:10.1007_s00148-015-0565-9
    DOI: 10.1007/s00148-015-0565-9
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    1. Giulia Bettin & Riccardo Lucchetti & Claudia Pigini, 2016. "State dependence and unobserved heterogeneity in a double hurdle model for remittances: evidence from immigrants to Germany," Mo.Fi.R. Working Papers 127, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    2. Lucchetti, Riccardo & Pigini, Claudia, 2017. "DPB: Dynamic Panel Binary Data Models in gretl," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 79(i08).
    3. Bernard Poirine & Vincent Dropsy, 2019. "Diaspora growth and aggregate remittances: an inverted-U relationship?," Applied Economics, Taylor & Francis Journals, vol. 51(11), pages 1151-1165, March.
    4. Gabriele Angori & David Aristei, 2020. "Heterogeneity and state dependence in firms’ access to credit: Microevidence from the euro area," SEEDS Working Papers 0220, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Feb 2020.
    5. Pigini, Claudia & Presbitero, Andrea F. & Zazzaro, Alberto, 2016. "State dependence in access to credit," Journal of Financial Stability, Elsevier, vol. 27(C), pages 17-34.
    6. Francesco Bartolucci & Claudia Pigini, 2017. "Granger causality in dynamic binary short panel data models," Working Papers 421, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    7. Bharadwaj, P. & Doiron, D. & Fiebig, D. G. & Suziedelyte, A., 2020. "Psychological Costs of Migration: Home Country Natural Disasters and Mental Health," Working Papers 20/03, Department of Economics, City University London.
    8. David Aristei & Gabriele Angori, 2022. "Heterogeneity and state dependence in firms’ access to bank credit," Small Business Economics, Springer, vol. 59(1), pages 47-78, June.
    9. Bettin, Giulia & Lucchetti, Riccardo & Pigini, Claudia, 2018. "A dynamic double hurdle model for remittances: evidence from Germany," Economic Modelling, Elsevier, vol. 73(C), pages 365-377.

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    More about this item

    Keywords

    Migration; Remittances; Persistence; State dependence; Discrete panel data models;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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