Since the 1980s, the theoretical and empirical literature on the
motivations to remit has grown steadily. We review the microeconomic
literature and show that the theoretical motivations to remit are
overlapping while competing. We argue that in most cases this
differentiation is unnecessary and makes the subsequent empirical
applications weak. We apply the theories in Albania and Moldova, two
countries that experience high migration and remittance flows, using
household survey data. We focus on finding evidence for the theoretical
motivations to remit such as altruism, loan repayment, co-insurance and
the bequest motive and using a similar methodology and approach as
previous empirical research. As for other empirical papers, the analysis
leads to doubtful and multi-interpretable results. We argue that this
problem is caused by weak operationalisation and inseparability of
motives, compounded by data problems. Furthermore we argue that the
decision to remit should not be looked at in isolation. It is apparent
that the causes and patterns of migration in Albania and Moldova
influence the remitting behaviour and most migrants migrate in order to
remit. It is thus vital to link the decision to migrate with the
decision to remit and to broaden the focus beyond the economic
literature and consequently provide a more relevant and clearer answer
to the question why remittances are sent.
Appears in: MGSoG Working Paper Series (discontinued)
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