Migration, Remittances and Public Transfers: Evidence from South Africa

What drives migration and remittance behaviour in South Africa, and what are the implications for public policy? This paper evaluates existing empirical evidence, posits a simple theoretical model and undertakes a fresh evaluation using longitudinal data spanning 1993 to 2004 from KwaZula-Natal province. Findings generally accord with expectations if migration is a family income-optimising strategy, with remittances sustained by migrant altruism. The key policy-relevant result is that receipt of public transfer income raises the likelihood of migration (most likely because migration is costly and households face liquidity constraints) and hence crowds in private transfers on average.