Do migrants send remittances as a way of self-insurance?
How do risk preferences affect migrant remittance behaviour? Examination of this relationship has only begun to be explored. Using a tailored representative survey of 1,354 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, that more remittances are sent by risk-averse immigrants who face higher wage risks and to individuals with more financial resources, is consistent with self-insurance although we cannot, with our data, rule out other exchange motives.
Batista, Catia and Janis Umblijs