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Remittance frequency, transaction fees and household impacts

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  • Zhu, Heng

Abstract

The usage and impact of remittances on rural development is a key research topic in the migration literature. A rather peculiar observation is that many migrants send money frequently, a method which can be very costly since the majority of transactions involve fixed costs. Most studies revolving around this topic focus on the volume of money that migrants send in a given timeframe, paying less attention to the frequency which the funds are actually sent and the role played by transactions costs. This research proposes a more nuanced approach of examining the impacts of remittances on household behavior by incorporating information on the frequency at which funds are received. It is hypothesized that frequent, regular remittances help households smooth their consumption over time and impact the savings, investment and consumption behavior differently compared to alternative methods. Additionally, remittance patterns driven by specific needs of the household are also likely to respond in heterogeneous ways when faced with changes in transactions costs.

Suggested Citation

  • Zhu, Heng, 2016. "Remittance frequency, transaction fees and household impacts," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235561, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235561
    DOI: 10.22004/ag.econ.235561
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