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Anna L. Paulson. "Insurance Motives for Migration: Evidence from Thailand." March 2000.
Migrants often maintain important connections with their origin
communities. In
particular, many migrants provide support to non-migrants, usually
relatives, through
remittances. Remittances are often an important source of protection
against adverse
events for the receiving household. The prevalence and the importance of
remittances
from migrants both as a source of income and as insurance, suggest that
migrants may
consider their role as future remitters in deciding where to locate. This
paler examines
whether the location choices of migrants who remit are consistent with a
desire to
mitigate the risk faced by the remitting and the receiving households.
Cross-sectional
household data on the location and earnings of remitters and remittees is
used together
with historical rainfall and gross domestic product data at the provincial
level to examine
this question for Thailand. The results indicate that insurance motives
play an important
role in explaining migration patterns. Empirical estimates that include
insurance
variables perform better than estimates that only consider income
maximization. I find
that remitters are significantly less likely to move to Bangkok the more it
covaries with
the province they remit to. This is particularly true for remitters who
support rural
households who are likely to be poorer and to have less access to national
level
institutions (like banks and insurance companies) that could be used to
mitigate local risk.
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