NDLI: The impact of liquidity constraints and imperfect commitment on migration decisions of offspring of rural households

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The impact of liquidity constraints and imperfect commitment on migration decisions of offspring of rural households

Content Provider	Semantic Scholar
Author	Delpierre, Matthieu
Copyright Year	2012
Abstract	This paper presents a non-cooperative model of intra-household decision-making regarding investment in migration. It is shown that the combination of liquidity constraints and imperfect commitment are a source of underinvestment in migration. More precisely, we highlight that, if remittances are unenforceable as a repayment for the parent’s contribution in migration transaction costs, then both the migrant and the parent’s liquidity constraints, rather than the household’s liquidity constraint as a whole, matter in determining the investment decision. Besides, the insurance motive for remittances is shown to generate divergence of interest over the characteristics of migration. This result calls for a theoretical approach that properly takes account of potential internalization problems, which the paper intends to offer. Plausibility checks of the model are provided by comparative statics whose outcomes are consistent with previous research on migration and remittances.
Starting Page	153
Ending Page	170
Page Count	18
File Format	PDF HTM / HTML
DOI	10.1007/s11150-010-9113-2
Volume Number	10
Alternate Webpage(s)	https://www.unamur.be/eco/economie/recherche/wpseries/wp/1011.pdf
Alternate Webpage(s)	https://doi.org/10.1007/s11150-010-9113-2
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article

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