The determinants of remittances: A comparison between Albania and Moldova

Jessica Hagen-Zanker (with Melissa Siegel), MGSoG

Using household survey data from Albania and Moldova, this paper compares remittance behavior between the two countries from the receiving perspective. This paper seeks to empirically test the probably to remit, as well as the amount of remittances in both countries. We focus on testing the theoretical motives to remit such as altruism, loan repayment (Moldova only), insurance (family or self-provided), the bequest motive and the New Economics of Labor Migration (Albania only). For robustness, we use both a Heckman two-stage model as well as a Tobit model to test the motives for remittances.

Date: 18 December 2006