Do Migrants Really Save More? Understanding the Impact of Remittances on Savings in Rural China

Abstract

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Remittances and Expenditure Patterns of the Left Behinds in Rural China

“…First, remittance-recipient households are found to spend more on consumption-type expenditures and less on pro-ductive investment. These findings from a large-scale recent dataset are consistent with what has been observed on small-scale databases for the end of the 1990s and the early 2000s (de Brauw and Rozelle, 2008;Zhu et al, 2012Zhu et al, , 2014). Yet, with the accelerating economic growth and labour mobility in China during the 2000s, the persistence of a consumption use of remittances may signal persisting difficulties in various markets in rural areas.…”

“…The relationship between migration and consumptive investment is shown to be particularly strong in non-poor areas, whereas it is not significant in poor areas. Exploiting data collected in 2006 on 1,498 households in Anhui and Jiangsu, Zhu et al (2012) obtain similar findings, with remittances being mainly used for consumption and not for investment purposes. Zhu et al (2014) The contribution of this paper is threefold.…”

“…The existing literature typically uses two main approaches to solve this methodological issue: an instrumental variable (IV) strategy or a propensity score matching (PSM) approach. Unlike previous studies on China that identify the effect of remittances using an IV strategy (de Brauw and Rozelle, 2008;Zhu et al, 2012Zhu et al, , 2014, we apply propensity score matching to identify the impact of remittances on the expenditure patterns of the families left behind. In the absence of reliable instruments, the PSM method offers the advantage of controlling for self-selection based on observable characteristics without imposing too strong distributional assumptions (Jimenez-Soto and Brown, 2012), although it relies on a strong identifying assumption of selection on observables.…”

It’s Not Just About the Money: Gender and Youth Migration from Rural China

“…These researchers suggest that households expect that migrants will care for the left behind members and will remit a portion of their earnings to the household after they leave (Borjas 1993; Lucas and Stark 1985; Mincer 1977; Tcha 1996). In studies of behavior towards the left-behind population, a common indicator of migrant’s altruistic economic behavior is the amount of remittances given to the family (see Agarwal and Horowitz 2002; De Brauw and Rozelle 2007; Zhu et al 2012). However, remittances are an indirect measure of altruistic values.…”

Saving out of Remittances: Evidence from Ethiopia and Kenya

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This article examines the saving behaviour of remittance recipients in Ethiopia and Kenya. The average savings rate exclusively among recipients was also positively related to remittance income.More recently, Adams (2002) and Zhu et al (2012) have estimated the marginal propensity to save (MPS) out of remittance receipts explicitly. The analysis presented here relies on ordinal saving categories reported in response to a direct survey question.

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