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Strategic and Altruistic Remittances

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  • Frédéric Docquier
  • Hillel Rapoport

Abstract

Economists’ conjectures on the motives for private income transfers (more or less pure kinds of altruism, mutual insurance or other exchanges of services, and so on (Cox, 1987; Andreoni, 1989; Coate and Ravaillon, 1993)) and for migration (Sjaastad, 1962; Mincer, 1978) have recently been mixed in a fascinating debate regarding the motivations to remit (Stark, 1980; Rempel and Lobdell, 1980; Lucas and Stark, 1985; Hoddinott, 1994). Indeed, remittances might be both the cause and the consequence of migration, and it is necessary to treat those two interdependent decisions in an encompassing framework. Among many plausible comprehensive explanations, the possibility of strategic self-selection among migrants through remittances has been raised by Stark (1995, ch. 4). Stark’s rationale is approximately as follows: when migrants are heterogeneous in skills and individual productivity is not perfectly observable on the labour market of the host country (for at least a certain period of time), migrant workers are paid the average productivity of the minority group to which they belong. In such a context, there is room for cooperative arrangements between skilled and unskilled migrants: the former can act cohesively and ‘bribe’ the latter in order to keep them at home. The interaction results in a selection bias (only skilled workers migrate), and Pareto-efficiency is enhanced.
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Suggested Citation

  • Frédéric Docquier & Hillel Rapoport, 2000. "Strategic and Altruistic Remittances," ULB Institutional Repository 2013/229586, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/229586
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    Cited by:

    1. Jamal Bouoiyour & Mohamed Jellal & Francois Charles Wolff, 2003. "Effective cost of brain drain," Post-Print hal-03913181, HAL.
    2. Aísa, R. & Andaluz, J. & Larramona, G., 2011. "How does bargaining power affect remittances?," Economic Modelling, Elsevier, vol. 28(1-2), pages 47-54, January.
    3. Jonathan Meer & Harvey S Rosen, 2007. "Altruism and the Child-Cycle of Alumni Donations," Working Papers 150, Princeton University, Department of Economics, Center for Economic Policy Studies..
    4. Jellal, Mohamed, 2014. "Diaspora famille transferts et contrat implicite [Diaspora famille and transfers as implicit cintract]," MPRA Paper 57387, University Library of Munich, Germany.
    5. Jellal, Mohamed, 2014. "Diaspora transferts information et prudence [Remittances uncertainty and prudence]," MPRA Paper 57797, University Library of Munich, Germany.
    6. Ibrahim Sirkeci & Jeffrey H. Cohen & Dilip Ratha, 2012. "Migration and Remittances during the Global Financial Crisis and Beyond," World Bank Publications - Books, The World Bank Group, number 13092.
    7. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 17, pages 1135-1198, Elsevier.
    8. Nonna Kushnirovich, 2021. "Remittances of Immigrant Citizens, Attachment to the Host Country and Transnationalism," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 40(5), pages 931-954, October.
    9. Jonathan Meer & Harvey S. Rosen, 2007. "Altruism and the Child-Cycle of Alumni Giving," NBER Working Papers 13152, National Bureau of Economic Research, Inc.

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