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The Welfare State and International Remittances

J. Atsu Amegashie & Michael Batu

Finnish Economic Papers2020article
ABDC B
Weight
0.26

Abstract

It is well known that a prudent agent will increase precautionary savings in response to greater uncertainty of future income. The welfare state, being an insurance or consumption-smoothing mechanism, reduces the negative welfare effect of future income uncertainty. Using a model of remittances and savings, we show that an immigrant will increase his remittances in response to a first-order risk decrease in future income. Using changes in the size and generosity of the welfare state as a measure of changes in future income risk, we empirically test the prediction of our model using panel data of remittance outflows from OECD countries. Our empirical analysis finds that there is a positive relationship between a more generous welfare state and remittance outflows.

Cite this paper

@article{j.2020,
  title        = {{The Welfare State and International Remittances}},
  author       = {J. Atsu Amegashie & Michael Batu},
  journal      = {Finnish Economic Papers},
  year         = {2020},
}

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The Welfare State and International Remittances

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Evidence weight

0.26

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.00 × 0.4 = 0.00
M · momentum0.20 × 0.15 = 0.03
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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