Remittances to Nicaragua and El Salvador

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Remittances to Nicaragua and El Salvador

• Article Presentation-
• Cristina Ventresca

2
Background

• Remittance money sent to native country from
  foreign worker
  
• Have significant role in development of
  countries
  
• Not much data out there!

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Background.. Part II

• Nicaragua and El Salvador both had huge
  out-migration in 1980s
  
• Remittances to El Salvador is estimated between
  400-600 million
  
• Nicaragua is a little less than 100 million
• San Salvador receives more than double that of
  Managua!

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Why such Differences?

• Some theories
• Politically
• El Salvador moves right
• Nicaragua moves left
• Different pool of immigrants

• Timing/permanence
• Nicaraguans came later
• Less time for assimilation
• Differences in countries themselves

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Formulas

• Author of article created formulas to calculate
  remittances
  
• Like this one
• U(UmCm)Um(Cm) VUh(Ch), Z
• U is utility, C is consumption, Z represents
  relationship between migrant and household
  
• Author creates more formulas from this..

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Formulas tell us

• Emigrants with higher working potential remit
  more
  
• Lower household income in native country
  associated with higher remittances
  
• Relative importance of household involves marital
  status
  
• Amount sent home is negatively related to number
  of emigrants from same household
  
• When wages go up, remittances go up

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Specifics of the Countries

• El Salvador
• No correlation between sex and age
• More educated send more remittances
• Familial relationships the most important
• With immediate family, longer stay in host
  country, more remittances
  
• With not immediate, longer stay means less
  remittances
  
• If household is in urban region, more likely to
  remit

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Specifics for Countries, cont.

• Nicaragua
• First two points same as El Salvador
• More educated, more remittances
• Familial relationships the most important
• Age is negatively correlated
• Increases in years in general of migrants in host
  countries means decrease in remittances

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What does it mean?

• Differences in remittances is just due to
  behavioral and attitudinal differences between
  countries!
  
• Much more from Nicaragua can remit but do not
• Nicaraguans seem to have more familial
  detachment