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 unde...

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Main Authors:	Seshan, Ganesh, Zubrickas, Robertas
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2015
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

id	okr-10986-22452
recordtype	oai_dc
spelling	okr-10986-224522021-04-23T14:04:08Z Asymmetric Information about Migrant Earnings and Remittance Flows Seshan, Ganesh Zubrickas, Robertas 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 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. 2015-08-17T19:15:46Z 2015-08-17T19:15:46Z 2015-07 Working Paper http://documents.worldbank.org/curated/en/2015/07/24784147/asymmetric-information-migrant-earnings-remittance-flows http://hdl.handle.net/10986/22452 English en_US Policy Research Working Paper;No. 7368 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Middle East and North Africa South Asia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	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
spellingShingle	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 Seshan, Ganesh Zubrickas, Robertas Asymmetric Information about Migrant Earnings and Remittance Flows
geographic_facet	Middle East and North Africa South Asia
relation	Policy Research Working Paper;No. 7368
description	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.
format	Working Paper
author	Seshan, Ganesh Zubrickas, Robertas
author_facet	Seshan, Ganesh Zubrickas, Robertas
author_sort	Seshan, Ganesh
title	Asymmetric Information about Migrant Earnings and Remittance Flows
title_short	Asymmetric Information about Migrant Earnings and Remittance Flows
title_full	Asymmetric Information about Migrant Earnings and Remittance Flows
title_fullStr	Asymmetric Information about Migrant Earnings and Remittance Flows
title_full_unstemmed	Asymmetric Information about Migrant Earnings and Remittance Flows
title_sort	asymmetric information about migrant earnings and remittance flows
publisher	World Bank, Washington, DC
publishDate	2015
url	http://documents.worldbank.org/curated/en/2015/07/24784147/asymmetric-information-migrant-earnings-remittance-flows http://hdl.handle.net/10986/22452
_version_	1764451113555197952

Asymmetric Information about Migrant Earnings and Remittance Flows

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