Who Remits? The Case of Bangladesh

In this study use a unique survey data from Bangladesh to assess the characteristics of the individuals who remit. Unlike all previous studies, this study have information on the sender and the receiver from the same source which estimate a heteroskedastic Tobit with a known form of heteroskedasticity which allows to examine the correlation of the remitting decisions of migrants in the same original receiving household. This study find evidence supporting a positive correlation between migrants’ remitting decisions. Gender, labor force status, and destination of the migrant all have significant effects on remittances. The relationship of the migrant to the head of the household also affects the remitting behavior. The labor status and the level of education of the head of the receiving household influence the migrant’s decision to participate in the remitting behavior. Evidence suggests that there is a positive correlation between migrants’ remitting decisions among migrants belonging to the same receiving household. The main contribution of this paper is the ability to quantify the correlation of the remitting decisions between migrants who belong to the same receiving household. The ability to measure this relationship is crucial since it allows further understanding of how intra-family decisions are made regarding the allocation of resources across households that are separated by migration. The knowledge of the mechanism of intra-family remitting decisions shed light on the indirect outcomes of remittance policies