Money will come from abroad : formation of remittance expectations and its implications for perpetuation of family migration.
Date
2013-02-22
Authors
Antobam, Samuel Kojo
Journal Title
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Abstract
In any act of household migration, there are movers (the migrant) and stayers (those left
behind), and both of these two groups have expectations. The movers expect to make some
benefits at the destination while the stayers expect the migrant to send or do something at
home of origin. Some work, though limited, has been done to improve our understanding of
how potential migrants form their expectations of what they can get from the destination
country in studies involving determinants of individual migration. But for those left behind
very little is known about how they form their expectations of what they can get from the
migrant. The few studies that have been done on this have only used observed flow of
remittances to estimate what people left behind expect from migration. Hence these studies
equate observed flow of remittances to expected flows. And by this equation, these studies
also assume perfect information flow between migrants and relations left behind as well as
perfect knowledge to help those left behind to form realistic expectations: expectations that
reflects exactly what can be sent to them. Obviously these assumptions are not tenable.
These untenable assumptions also leave a hole in our ability to explain why a household will
choose to either continue supporting members for migration or not. This is because we cannot
tell from observed data alone whether or not the desire to continue to support migration of a
household or a family member is as a result of well-informed subjective expectations or not.
The crust of the problem here is therefore that by relying on observed data alone we fail to
account for the important role subjective expectations or beliefs of those left behind play in
decisions for further migration movements, especially within the family.
To be able to unravel this problem we need elicitation of subjective expectations of
remittance flows from those left behind. Using data from a specially designed survey in two
districts in Ghana, I construct time-adjusted subjective remittance expectations of migrant
families at home of origin and analyse the factors that determine the formation of these
expectations and how formation of these expectations can help us explain perpetuation of
migration within a household. The key analytical models employed in these investigations are
summarised below
In order to understand the exogenous determinants of remittance expectations of migrant
households, I first of all estimate factors that influence performance of migrant at home of
origin and general flow of information between the migrants and the household members left
behind. In order to see the effect of remittances on formation of subjective expectations,
remittance flow was measured in terms of migrant performance by adjusting the flows to the
time period during which the migrant could do what he or she has done. The items were
limited to the popular ones people receive: money for living expenses, establishment of a
house and business investment. The theoretical explanation for this adjustment is that if the
observed trend in remittance flow has any effect on expectations it would be through
individual household’s evaluation of what migrants have achieved within a certain number of
years. In other words, all things being equal, families whose migrants took much longer
period to achieve certain things would have lower levels of expectations than a comparable
family whose migrant took relatively shorter period. This is because taking a long time to
achieve something at home of origin would breed some kind of skepticism and uncertainty
among those left behind as to what they can get from migration. And this skepticism can lead
to low levels of expectations. This is also in line with the reference people left behind often
make when talking about achievements of migrants at home of origin as they always point to
what XYZ has done. Ordinary least squared regression is then used to estimate factors
determining level of migrant performance at home of origin after the transformation of the
dependent variable: migrant performance. Heckman selection model is also applied to control
for possible effect of bias since some households have migrants who have done nothing at
home. Kinship ties are the major factors under this investigation.
To determine the main factors influencing information flow, ordinary least squared estimates
are used while a generalised ordered logit model, with maximum likelihood method, is used
to estimate the factors influencing the likelihood of a household getting higher categories of
private/dedicated information from the migrant. Major factors for this investigation are
kinship ties and performance of migrant at home of origin. Since information flow and
remittance flows are suspected to have endogenous relationship, instrumental variables (IV)
technique is employed to estimated impact of remittance flow on both private and public
information flows. This is important for us to understand how information flow act as
exogenous determinant of subjective remittance expectations, and resultant effect on
perpetuation of migration.
Once current information flow and performance of migrants have been examined and effects
of their exogenous factors estimated, the next stage of the analysis is the examination of
effects of these past performance and information flow on household subjective remittance
expectations while controlling for other major exogenous factors such as kinship ties, level of
education and household wealth. Ordinary least square regression technique is used to
estimate major determinants of these levels of expectations. However, to control for possible
bias resulting from the fact that a select group of households may not expect anything,
Heckman selection model is applied.
The final analysis is the estimation of impact household subjective remittance expectations on
migration-support intentions. Due to the problem of endogenous relationship between
expectations and migration decisions, ordinary maximum likelihood estimates would not be
very effective in identifying the real impact expectations have on migration decisions. Hence
I use maximum likelihood with endogenous repressors to estimate or identify the influence of
expectation on potential migration decisions, applying the probit model with selection model
(heckprob) technique. Ordered probit analysis is also used to investigate what determines
household’s desire to support more than one person for migration. The results are
summarised below.
Summary of Findings
Economics and sociology literature makes us aware that in order to understand formation of
expectations of any kind we first have to investigate two important factors: past events and
current information flow, because these are the two factors that hugely influence
expectations. Hence, for us to understand remittance expectations, we first have to understand
two issues: observed past flows of remittances and current flow of information between the
migrant and relations left behind at home of origin.
If remittance flows should influence household or family’s (including the extended family
members) subjective expectations and the support to move abroad, it should largely do so in
terms of what has been observed in the past. In Chapter Six, I investigated the influence of
kinship ties on receipts of remittances. As expected, closer migrant relations such as spouse
and head of family stand a much better chance of having better performance from migrant
than distant kinship ties such as friendship. However when it comes to performance in
individual items such as house or business investment, a household cannot rely only on
kinship ties with migrant. It should also have some wealth. Specifically, among the kinship
ties only spousal relationship was found to have positive effect on migrant performance in
areas such as housing and business investment. Thus the influence of kinship ties on observed
flow of remittances is mostly limited to money for living expenses, unless the family left
behind is wealthy enough to enable allocation of what is sent into other things such as
investment in housing and business.
With kinship ties being very influential in the determination of past performance of migrants
one would expect that these ties would also influence information flow if the assumption of
remittance and information flow being together holds. It has always been assumed by
cumulative causation theories of migration that together with the flow of remittances from
migrant to relations back at home is the flow of information that connects migrant, potential
migrants and those left behind (Massey et al, 1993). If this is the case then relationship
should be a key factor in determining information flow from the migrants, because these ties
influence flow of remittances. Results from the 2SLS model show that remittance flow has
impact only at the lower levels of private information flow, reinforcing the point that
information that comes with remittance flow may just be social issues such as size of family,
marital status, and not economic ones. In spite of their strong effect on remittance flow or
migrant performance, all the types of kinship ties generally have negative effects on private
information flow. Thus kinship ties are not enough for those left behind to get more private
information from the migrant relations residing abroad.
It should not be surprising that remittance flows do not lead to higher levels of information
flow from the migrants to those left behind. This is because remittances are mostly made up
of monetary transfers for living expenses which may not carry much information with it as, in
most cases, migrants do not require monitoring. And with electronic transfers of these days,
it becomes more implausible to assume that remittance flows, which are mostly limited to
monetary transfers, would generate private information as the interpersonal exchanges in
these transfers become more and more reduced. But since the lower levels of private
information flows only contain pieces of information such as marital status, household size
and education levels, it follows that remittance flow may not be the best channel through
which relations get important information about the socioeconomic conditions of the migrant.
Perhaps this assumption was more plausible about 30 years ago when migrants mostly relied
on methods such as using other migrants going home. Families left behind have to rely on
their wealth or good level of education to be able to source information from the migrants.
On the other hand, remittance flow or migrant performance has highly significant and
positive influence on public information flow, suggesting that what migrants do at home
influence some perceived knowledge of the migrants’ socioeconomic conditions. It is also
interesting to note that factors such as average household education and wealth that have
significant positive effect on private information flow have negative effect on public
information flow. One can therefore deduce that the more families are able to access
information from the migrants themselves, the less they rely on migration information from
nonmigrant sources or the general public in the community of origin. Unfortunately
remittance flow is unable to help those left behind to get more information from the migrant.
Hence most of them will have to rely on public information.
With the flow of crucial information such as economic conditions of migrants lacking or
being inadequate, it can be concluded that there would be some level of uncertainty about
conditions. And this level of uncertainty may lead to some guess-work or reliance on
information from other sources in the formation of remittance expectations. That is, would
their inability to access crucial information on economic conditions of the migrants “push”
them to rely on information reaching them from other sources in the formation of
expectations? Also if the wealthy and the more educated families are more likely to know
more about the migrants, and if knowing more about the migrant is most likely to temper
high expectations with realism as hypothesized in this study, would it be fair to conclude that
wealthier and more educated families may have ambivalent, if not negative expectation
levels?
Results from Chapter Seven show that families would use their experience of what migrants
have done at home of origin as a starting point in the formation of their remittance
expectations in terms of whether or not they should expect something. But once their
expectation status is assured, families are much more influenced by other factors than migrant
performance in the formation of their subjective remittance expectation levels. In other words
at lower levels of information, remittance expectations seem to be more adaptive to past
trends of observed remittance flows. Kinship ties become very significant in this respect in
spite of its insignificant influence on information flow. This raises a question of whether or
not the effect of kinship ties on formation of remittance expectations is informed by
information from the migrants. All the results point to the contrary. The effects of kinship ties
on subjective remittance expectations are informed more by past experience of remittance
receipts than current dedicated/ private flow of information between the families and the
migrants. When kinship ties are interacted with private information their effects on
remittance expectations are, however, significantly reduced, indicating that when people take
private or dedicated information into consideration their high expectations are very much
checked.
What are the implications of subjective remittance expectations form under low levels of
dedicated information flow for migration decisions? Chapter Eight sought to provide the
answer to this question. The results confirmed the hypothesis that subjective remittance
expectations formed under inadequate flow of dedicated information would lead to increasing
desire to support more migration from the family and the opposite should also true. That is
under inadequate information flow, subjective remittance expectations have highly positive
effect on desire to perpetuate migration more than the demonstrative effect of migrant
performance, emphasizing the importance of expectations in perpetuation of migration.
However, the strong effect of expectations and kinship ties on desire to support migration
could be reduced if high levels of dedicated information are taken into consideration. Further
investigation into why some families with remittance expectations would still not want to
support members to migrate revealed that, in addition to private or dedicated information
flow, average household education level is a major factor that discourages families with
remittance expectations from further supporting members to migrate. This is in sharp contrast
with the generally accepted view that education selects families and individuals into
migration, especially international migration. This is true in the general population. When
only migrant families are sampled, as in this study, the effects of education on migration are
tempered with information flow. Education allows the family to access more and more of
private/dedicated information which has negative effect on remittance expectations. It is
therefore not surprising that education may discourage families with expectations to continue
supporting migration. But since most people do not get the private information or do not even
consider it as, expectations which are hugely informed by past performance, public
information and mere kinship ties would continue to drive perpetuation of migration, at least,
at the household level.