Network Effects in Migrant Remittances

Abstract

Migrant remittances comprise an important capital source for developing countries. Research to date connects migrants' remittance behavior to altruism, exchange, insurance, and investment motives or to a desire to maintain options available through origin communities. This study provides an alternative 'network' perspective: remittance behavior may depend on the remitting patterns of those in one's social ties: (a) to members of the origin household, (b) to members of 'sibling' households, where a member of the ego household has a sibling, and (c) to members of the origin village. We explore this idea using complete census data from 51 villages in Nang Rong, where one in four residents migrated to internal destinations in either 1994 or 2000, and about half of those migrants remitted to their origin households. We find preliminary evidence on network effects: migrants' likelihood of remitting increases with the number of remitters in the household and with the share of remitters in the village, net of other determinants of remittance behavior, village and year fixed effects, and other potential confounders. We provide additional evidence that connects the former pattern to inheritance-seeking behavior in the household, and the latter to shared norms in the village.

The economic side of social remittances: how money and ideas circulate between Paris, Dakar, and New York

“…Although recent publications explore the social dynamic underpinning economic remittances (see Carling, 2014; Garip, Eskici, & Snyder, 2014; Lacroix 2014). …”

“…In other words, monetary transfers are part of interpersonal, and sometimes, intimate relationships. Economic remittances are critical to sustain ties, both between non-migrants and migrants and between migrants at destination (Carling, 2014; Garip et al, 2014; Lacroix, 2013, 2014; Senne, Chort, & Gubert, 2011). …”

“…Garip et al, (2014) also emphasize migrants’ social incentives to remit. They test the hypothesis that remittances stem from “ interrelated individual behaviors ”.…”

“…as messages or public stances migrants endorse regarding their obligation towards their origin community” (2014). Qualitative (Carling, 2014; Lacroix, 2014) and quantitative (Garip et al, 2014; Senne et al, 2011) approaches thus converge toward the idea that economic remittances are spurred by relational dynamics rather than economic concerns.…”

“…Although, economic remittances represent perfectly the social nature of monetary transactions. As stated above, remittances are fostered by individuals’ relationships at origin (Garip et al 2014), and at destination (Senne et al 2011), they make sense in the context of a given social group (Carling 2008, 2014) and they contribute to reaffirm migrants’ belonging to their community of origin (Lacroix 2013, 2014). As such, economic remittances are a telling illustration of the concept of “relational work” coined by Viviana Zelizer (Zelizer, 2005; Zelizer, 2011).…”