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Comparative effects of migrants' remittances on composition of recipient household income in two small, island economies

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  • Richard Brown
  • Gareth Leeves

Abstract

We use unique household survey data from Fiji and Tonga to estimate and compare the combined impact of migration and remittances on the composition of household income. A two-step methodology is followed employing a migration prediction model followed by the estimation of a Three Stage Least Squares (3SLS) remittances and income equation system. We find that remittances contribute to growth in productive capital and entrepreneurial activity in the longer-established migrant economy, but have yet to impact on business activity in the more recently remittances-oriented economy, despite it having a more developed, market economy. In the latter case, remittances seem more linked to supporting consumption through supplementing low wage income. These findings suggest that the duration and intensity of remittance-driven migration, and the structure of economic activity within a community are important in understanding the influences of migration and remittances on household resource allocation and production decisions.

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  • Richard Brown & Gareth Leeves, 2011. "Comparative effects of migrants' remittances on composition of recipient household income in two small, island economies," Applied Economics, Taylor & Francis Journals, vol. 43(27), pages 3965-3976.
    • Handle: RePEc:taf:applec:v:43:y:2011:i:27:p:3965-3976
    DOI: 10.1080/00036841003742611
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    1. Randazzo, Teresa & Piracha, Matloob, 2019. "Remittances and household expenditure behaviour: Evidence from Senegal∗," Economic Modelling, Elsevier, vol. 79(C), pages 141-153.
    2. Madhav Regmi & Krishna P. Paudel, 2017. "Food security in a remittance based economy," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 9(4), pages 831-848, August.
    3. John Gibson & David McKenzie & Steven Stillman, 2013. "Accounting for Selectivity and Duration-Dependent Heterogeneity When Estimating the Impact of Emigration on Incomes and Poverty in Sending Areas," Economic Development and Cultural Change, University of Chicago Press, vol. 61(2), pages 247-280.
    4. Richard Brown & Jørgen Carling & Sonja Fransen & Melissa Siegel, 2014. "Measuring remittances through surveys," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 31(41), pages 1243-1274.
    5. Jolejole-Foreman, Maria Christina & Baylis, Katherine R. & Lipper, Leslie, 2012. "Land Degradation’s Implications on Agricultural Value of Production in Ethiopia: A look inside the bowl," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126251, International Association of Agricultural Economists.

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