NOVAFRICA Working Paper: “Do Migrants Send Remittances as a Way of Self-Insurance?”

A new working paper has been added to the NOVAFRICA Working Paper Series.
Written by Catia Batista and Janis Umblijs, this paper uses a tailored representative survey conducted in Ireland to examine the relationship between risk aversion and migrant remittances.

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

Authors:
Catia Batista and Janis Umblijs.

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.