The time pattern of remittances and the decay hypothesis

Evidence from migrants in South Africa

Bibliographic Data

ID15538411
AuthorsDaniel Makina (0000-0003-2930-2187, University of South Africa, corresponding author), Andries Masenge (0000-0001-8372-2356, University of South Africa)
Year2015
Volume12
Issue1
Pages79-90
Publication date2015-01-04
Open AccessYes
TypeARTICLE
VenueMIGRATION LETTERS (JOURNAL)
Journal identifiersISSN: 1741-8984 • E-ISSN: 1741-8992
PublisherDewspublication (PUBLISHER)
DOI10.33182/ml.v12i1.258
OpenAlexW1598588041
LanguageEN
Citations received7

Using a dataset of migrants who migrated to South Africa over the period 1979-2007, we investigate the time pattern of remittances and the determinants of remittances. We find that the level of remittances first increases with the time spent in the host country and later on declines after an estimated 8 years of migration experience and thus exhibiting an inverted-U pattern over time. This finding lends support to the remittance decay hypothesis. We also find the level of remittances to be significantly positively related to the number of dependents in the home country, legal status, access to banking, income and savings levels, and negatively related to the education level, return intentions, frequency of home visits and economic and political reasons for migrating. Furthermore, the level of remittances is observed to exhibit an inverted U-profile with the age of the migrant, that is, it first rises in early age and falls in old age. The remittance decay phenomenon is seen to stem from a mixture of the theories of altruism and the informal loan repayment alluded to in the literature

Altruism (biology · Demographic economics · Economic growth · Economics · Loan · Macroeconomics · Political science · Politics · Remittance · Employment and Welfare Studies · Migration and Labor Dynamics · Migration, Ethnicity, and Economy · Psychology

Tools

Open DOIOpen Access