The author analyzes remittance behavior among new legal immigrants in the US using a nationally representative survey of immigrants admitted to legal permanent residency in 2003. She finds that the distribution of remittances is skewed to the right, with a small number of immigrants sending very large amounts. She finds evidence against the pure altruism model and find that remittances may be used for investments in the home country. Using longitudinal data from the New Immigrant Survey (NIS), the author constructs a measure of permanent income and estimate remittance-income elasticities. She finds that large country differentials in remittance behavior are only partially explained by observable characteristics of the donor, recipient and origin country. Future work will incorporate later waves of the 2003 NIS in order to observe return migration (and its relationship to remittance and home country investment decisions) and life cycle income-remittance movements.
Working Paper, No. 2008-19, September 2008
Remittance Behavior among New U.S. Immigrants