Migrant Remittances Case Study

732 Words3 Pages
Remittances results from the migration of people from one continent to another or from one region or state to another in a country. Migrants usually move from developing countries to the developed economies and urban areas to rural areas to seek for better opportunities and employment. Subsequently, they sent home part of the earnings that accrue to them in the host country. What are the motives behind such remittances sent home? Is it for self-interest, family utility or profit purposes? This part of the study seeks to find out. The literature on remittances identifies altruistic reasons as a fundamental motive for migrant remittances. Lucas and Stark (1985) assert that ‘’certainly the most obvious motive for remitting is pure altruism- the…show more content…
Among them is the desire and aspiration to inherit which is conditioned on good behaviour including the ability of the migrant to remit and maintain the family back home. To be continually being in the good books of family members back home and to brighten the chances of the migrant to inherit the family line, migrants in their own self-interest send remittances to family members to keep their traditional positions. Indeed, the frequency and volumes of remittances sent will enhance the chances of the migrant. Related to this, is the self-interest reason of a migrant to invest or buy an asset in the home country. Migrants remit to buy assets like land or real estate or invest in any project in which case, the family back home acts as trusted agent to select and maintain the asset or see to the project. The level of trust in this migrant-family relationship is enhanced by altruism motives. A third related factor to self-interest is the intention to return home after sometime abroad. To be accepted in the home country on return, migrants remit to purchase assets and places of abode, maintain friends and the society as a whole. When this is done, integrating into the home society becomes less…show more content…
It is considered as tempered altruism or tempered self-interest. Lucas and Stark (1985) consider remittances in this case as ‘’part of an intertemporal, mutually beneficial contractual arrangement between migrant and home’’. Two components underlie this theory; investment which is classified as loan repayment by other writers and risk considered as insurance. It is a known concept in developing economies that families finance the education and migration of members. Family resources are channeled to educate and train family members when they are not earning. When such family members settle in the host countries and begin to earn, they begin to pay back the investment made on them through regular remittances. Other writers perceive the family as a bank that finance the education and migration of members and that repayment of principal and interest are paid in the form of remittances (Johnson and Whiteman, 1974; Rempel and Lobdell, 1978). However, it does not mean remitting a large portion of migrant’s income though sufficient enough as migrant’s education rises, thus buttressing the altruism model which propose a positive correlation between remittances on the one hand, and wages and education on the other hand. To re-echo this, the bigger the costs incurred on a migrant’s education and trip, the higher the expectation of remittance

More about Migrant Remittances Case Study

Open Document