Financial development and remittances: Micro-econometric evidence

We estimate a behavioural model of household’s remittances to investigate to what extent the level of financial development in the home country affects decisions on whether and how much to remit. ► We study how financial development in migrants’ home-country affects remittances. ► A micro-econometric model is estimated which avoids the usual endogeneity problems. ► The double-hurdle model separates the decision to remit from the remittance amount. ► Financial development in the home-country leaves the propensity to remit unaffected. ► Conversely, the amount of money remitted increases with financial development.