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On the Role of Social Comparisons in Shaping Migrants’ Remittance Behavior: Theory, and Evidence from China

In: World Scientific Handbook of Global Migration, Volume 2: Global Migration: Alternative Views and Social Comparisons

Author

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  • Stark, Oded
  • LaFave, Daniel

Abstract

We model how the remittances by a migrant are influenced by the remittance behavior of fellow migrants with whom the migrant compares himself. We show that an increase in the mean remittances of the group of fellow migrants encourages the migrant to increase his own remittances, and that this response holds only for those who lag behind the group mean. We test the model using longitudinal data on rural-to-urban migrants in major Chinese cities. We find support for the model’s predictions. Our results have implications for modeling remittance behavior and for the role of social comparisons in economic decisions.

Suggested Citation

  • Stark, Oded & LaFave, Daniel, 2024. "On the Role of Social Comparisons in Shaping Migrants’ Remittance Behavior: Theory, and Evidence from China," EconStor Open Access Book Chapters, in: World Scientific Handbook of Global Migration, Volume 2: Global Migration: Alternative Views and Social Comparisons, pages 53-82, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:eschap:297284
    DOI: 10.1142/9789811248139_0003
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    More about this item

    Keywords

    Mean remittances of a migrant’s reference group; A migrant’s own remittances; Social comparisons;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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