Asymmetric Information about Migrant Earnings and Remittance Flows

This paper examine asymmetric information about migrant earnings and its implications for remittance behavior using a sample of Indian households with husbands working overseas in Qatar. On average, wives underreport their husbands’ income and underreporting is more prevalent in households with higher earning migrants. The discrepancy in earning reports is strongly correlated with variation in remittances: greater underreporting by wives is associated with lower remittances. An exchange model of remittances is developed with asymmetric information and costly state verification. The optimal remittance contract prescribes a threshold for remittances that invites verification only if unmet. The model’s predictions closely match our empirical findings.

Bibliographic Details

Main Authors:	Seshan, Ganesh, Zubrickas, Robertas
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2015-07
Subjects:	BORROWER, REMITTANCE TRANSFER, HOUSEHOLD TRANSFERS, OPTIMAL CONTRACTS, FAMILY TIES, INFORMATIONAL ASYMMETRIES, UTILITY FUNCTIONS, LAGS, DISPOSABLE INCOME, SPOUSE, INCOME, INTEREST, EXPECTATIONS, REMITTANCE, EXCHANGE, OPTION, LEVELS OF EDUCATION, DEVELOPING COUNTRIES, BUS OPERATOR, VARIATION IN REMITTANCES, POLITICAL ECONOMY, IMMIGRANTS, POSITIVE COEFFICIENT, CDS, OPTIMIZATION, INCENTIVES, FAMILY MEMBERS, LOAN, POLICY DISCUSSIONS, VARIABLES, ASYMMETRIC INFORMATION, DEBT CONTRACTS, SOCIAL CONTROL, LOAN DECISIONS, USES OF REMITTANCES, REMITTANCE FLOWS, ANNUAL REMITTANCES, LOAN CONTRACT, INTERNATIONAL BANK, CENTER FOR DEVELOPMENT, LENDER, OPTIMAL CONTRACT, SPOUSES, REPAYMENT SCHEDULE, WORK EXPERIENCE, KNOWLEDGE, DEVELOPMENT, INTERNATIONAL MIGRATION, LABOR MARKET, URBAN MIGRATION, PARTICIPATION CONSTRAINT, DEVELOPMENT ECONOMICS, FINANCIAL STUDIES, INCOME SHOCK, CONTRACTS, IMMIGRATION POLICIES, FINANCES, MIGRATION, TRANSFERS, DEBT, MARKETS, HOUSEHOLD INCOME, NUMBER OF MIGRANTS, RETURN, LOTTERY, INCOME LEVELS, UTILITY, MIGRANTS, AVERAGING, REMITTANCE USE, FINANCE, RESPECT, INFORMATION ASYMMETRY, PROGRESS, EXPENDITURE, TRANSACTION, INVESTORS, CONSUMPTION, INFORMATIONAL ASYMMETRY, MIGRANT, GOOD, POLICIES, DERIVATIVE, REMITTANCE RECIPIENTS, FUTURE, POLICY RESEARCH WORKING PAPER, VALUE, INCOME SHOCKS, RETURNS, EXCHANGES, WORKSHOP, RECIPIENT HOUSEHOLDS, CONTRACT, REPAYMENT, INCOMES, PROPERTY, SOCIAL NETWORKS, PROPERTIES, MIGRANT WORKERS, MEASUREMENT, SHARES, TRANSACTION COSTS, MARKET, TEMPORARY MIGRANTS, INTERNAL MIGRANTS, TEMPORARY MIGRATION, BULLETIN, MASCULINITY, ECONOMICS, POLICY, COLLECTIVE REMITTANCES, HUSBANDS, INSURANCE, GDP, GOODS, INVESTOR, INVESTMENT, EXPECTED UTILITY, SHARE, FINANCIAL INFORMATION, ILLNESS, IMMIGRATION, COMPETITIVE MARKETS, POPULATION, CHECK, POLICY RESEARCH, MIGRANT NETWORKS, RISK AVERSION, INHERITANCE, REMITTANCES, OUTCOMES, MARKET RETURNS, NEGATIVE INCOME SHOCKS, GUARANTEE, INCOME LEVEL, ECONOMIC CONDITIONS, EXTENDED FAMILY, DEVELOPMENT POLICY,
Online Access:	http://documents.worldbank.org/curated/en/2015/07/24784147/asymmetric-information-migrant-earnings-remittance-flows http://hdl.handle.net/10986/22452
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