Why Do they Remit? Examining Factors Influencing Migrant Remittances in India

Abstract

Little is known about the factors that determine the remittance behaviour of migrants in India. With socioeconomic transformations, the gradual change in female migration patterns for economic reasons also signifies their contribution to household well-being. Using the National Sample Survey (2007–2008) data and applying the Heckman’s two-stage procedure, this paper examines, separately, key determinants that influence the remittance behaviour of male and female migrants. Empirical estimates reveal that among various factors, monthly per capita expenditure, distance from origin, and duration of stay at destination are important predictors of remittance behaviour. These determinants of remittance highlight that migrants retain strong economic links with origin families not only to provide economic support but also for social ties. The findings provide support of contractual motive of remitting and suggest remittances are more effective in promoting development. Further, gender differences in remittance behaviour are observed for household size, occupational and educational level of the migrant.