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Do Migrants Send Remittances as a Way of Self- Insurance?

NOVAFRICA working paper series
Cátia Batista

Nova School of Business and Economics and NOVAFRICA, Nova University of Lisbon

Janis Umblijs

Ragnar Frisch Centre for Economic Research

ISSN 2183-0843
Working Paper No 1402
November 2014

Abstract

How do risk preferences affect migrant remittance behaviour? Examination of this relationship has only begun to be explored. Using a tailored representative survey of 1500 immigrants in the Greater Dublin Area, Ireland, we find a positive and significant relationship between risk aversion and migrant remittances. Risk-averse individuals are more likely to send remittances home and are, on average, likely to remit a higher amount, after controlling for a broad range of individual and group characteristics. The evidence we obtain is consistent with a “purchase of self-insurance” motive to remit in that we also find support for more remittances being sent by risk-averse immigrants who face higher wage risks and to individuals with more financial resources.

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