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Remittances as investment in the absence of altruism

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  • González-König, Gabriel

Abstract

In the absence of altruism, there is no obvious reason why a migrant should remit part of his income to his family for investment at the home location. If the family invests such income (in housing for example), why would they give it back to the migrant when he returns? This paper is based on the idea that certain people at a migrant's home location may punish those families who do not return those investments in order to prevent their own possibilities of receiving future remittances and investments from being adversely affected. We find that in equilibrium we can have remittances to be invested and given back to the migrant and remittances for private consumption by the migrant's family even in the complete absence of altruism on either the part of the migrant or his family.

Suggested Citation

  • González-König, Gabriel, 2005. "Remittances as investment in the absence of altruism," ZEI Working Papers B 08-2005, University of Bonn, ZEI - Center for European Integration Studies.
    • Handle: RePEc:zbw:zeiwps:b082005
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    References listed on IDEAS

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    1. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-1093, Nov.-Dec..
    2. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    3. Stark, Oded, 1989. "Altruism and the Quality of Life," American Economic Review, American Economic Association, vol. 79(2), pages 86-90, May.
    4. Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-817, August.
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    Cited by:

    1. Oded Stark, 2009. "Reasons for Remitting," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 10(3), pages 147-158, July.

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    More about this item

    Keywords

    Remittances; Altruism; Migration;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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