Are international remittances altruism or insurance? Evidence from Guyana using multiple-migrant households

While international remittances provide significant disposable income for many households in less-developed countries, there is no consensus on migrants' remittance motivation. Two principal competing explanations for remittances are altruism and risk sharing. This paper employs previously unanalyzed data to bring new evidence to the debate. We develop a simple theoretical model that yields distinct testable predictions for each motivation. Among the model's testable predictions is differential remittance behavior by migrants from households with multiple versus single migrants under altruism and risk sharing. Our estimation finds significant differences in remittance behavior of multiple and single migrants and these differences support the altruistic incentive to remit. (C) 2002 Elsevier Science Ltd. All rights reserved.