Migration, Remittances, and the Family

Abstract

Remittances by migrants along with migration itself are elements in a migrant familys intertemporal contractual arrangement. The reasons why the migrant and his family voluntarily enter into a mutually beneficial contractual arrangement with each other rather than with a 3rd party--are discussed and the conditions under which the contractual arrangement is self-enforcing are identified. Both parties can usually benefit from a number of Pareto-efficient mutual contractual arrangements. This gives rise to an indeterminacy problem solved through a bargaining process between the parties who consequently converge to a contractual arrangement implying a specific flow of migrant-to-family remittances. The chosen contractual arrangement reflects the relative bargaining powers of the parties and variables impinging upon these powers thus bear upon remittances. In the light of these arguments tests are conducted on observed remittance behavior across individual migrants in Botswana. (authors)