evaluating the economic impact of international remittances on developing countries using household surveys a literature review abstract this literature review covers 50 recent empirical studies of the economic impact of international remittances on the developing world that are based on household survey data it begins by reviewing the considerable methodological problems confronting economic work on international remittances and then examines the strengths and weaknesses of various economic studies of the impact of remittances in the developing world on such outcomes as poverty and inequality health and education investment and savings labour supply and participation and economic growth it finds that while international remittances generally have a positive impact on poverty and health in the developing world remittances can have negative effects on labour supply education and economic growth

the impacts of international migration on remaining household members omnibus results from a migration lottery program this brief summarizes the results of a gender impact evaluation study entitled the impacts of international migration on remaining household members omnibus results from a migration lottery program conducted in 2002 in tonga the study observed the impact of migration lottery program on the remaining household members of tongan emigrants on the individual and intra household level income falls rapidly by 22 to 25 percent with a rise in remittances failing to offset a large fall in labor earnings ownership of livestock durable and access to financial services is lower for the remaining household members diets change to be less nutritious and more rice and root crops immigration has a negative impact on household size there is no significant impact of migration on labor supply for men nor women funding for the study derived from the world bank stanford university the waikato management school and mardsen fund

extending a lifeline or cutting losses the effects of conflict on household receipts of remittances in pakistan summary i examine the causal effects of long term exposure to conflict measured at the micro level on households receipt of remittances among households residing in areas affected by the 2010 floods in pakistan using a dataset of 7802 households representative of all flood affected areas of pakistan in 2010 i employ iv estimation to overcome the endogeneity of conflict exposure and remittance receipts and control for a range of confounding factors i find that contrary to the literature from country level case studies long term exposure to conflict reduces households likelihood of receiving any remittances at all as well as the average amounts of remittances received however for households in the lowest food consumption expenditure quintile conflict has a positive effect on the likelihood of remittance receipts which provides evidence for the existence of heterogeneous effects as well as a significant micro macro gap in understanding the causal effects of conflict on remittance receipts

foreign exchange market intervention and expectations the yen dollar exchange rate abstract using press reports and official statistics on central bank intervention in conjunction with options market data we find that central bank intervention had no statistically significant systematic impact on the mean or higher moments of the exchange rate during 1993 2000 we also find that japanese authorities appeared to intervene mainly in response to deviations of the exchange rate from some implicit target levels and to a rise in market uncertainty u s monetary authorities intervened only in cooperation with the japanese authorities

decriminalization and marijuana smoking prevalence evidence from australia this article uses the 2001 national drug strategy household survey to assess the impact of marijuana decriminalization policy on marijuana smoking prevalence in australia both parametric and nonparametric methods are used the parametric approach includes endogenous probit switching two part sample selection and standard dummy variable models while the nonparametric approach uses propensity score stratification matching specification analyses are also conducted a nonparametric kernel based test is constructed to select between parametric and nonparametric models and the likelihood ratio test is used to choose among parametric models our analyses favor the endogenous switching model where decriminalization increases the probability of smoking by 16 2

entrepreneurship selection and performance a meta analysis of the impact of education in developing economies this meta analytical review of empirical studies of the impact of schooling on entrepreneurship in selection and performance in developing economies looks at variations impact across specific characteristics of the studies a marginal year of schooling in developing economies raises enterprise income by an average of 5 5 percent which is close to the average return in industrial countries the return varies however by gender rural or urban residence and the share of agriculture in the economy furthermore more educated workers typically end up in wage employment and prefer nonfarm entrepreneurship to farming the education effect that separates workers into self employment and wage employment is stronger for women possibly stronger in urban areas and also stronger in the least developed economies where agriculture is more dominant and literacy rates are lower

the great intervention and massive money injection the japanese experience 2003 2004 abstract from the beginning of 2003 to the spring of 2004 japan s monetary authorities conducted large scale yen selling dollar buying operations in what taylor 2006 has labeled the great intervention this paper examines the relationship between this great intervention and the quantitative easing policy the bank of japan was pursuing at that time first we find that about 40 percent of the yen funds supplied to the market by yen selling interventions were not offset by the boj s monetary operations and remained in the market for a while this is in contrast with the preceding period when almost 100 percent were immediately offset second comparing interventions and other government payments the extent to which the funds were offset was much smaller in the case of interventions suggesting that the boj differentiated between and responded differently to interventions and other government payments these two findings indicate that it is likely that the boj intentionally did not sterilize yen selling interventions to achieve its policy target of maintaining the current account balances of commercial banks at the boj at a high level finally we find that an unsterilized intervention had a greater impact on the yen dollar rate than a sterilized one suggesting that it matters whether an intervention is sterilized or not even when the economy is in a liquidity trap

remittances investment and rural asset accumulation in pakistan internal and external migration can have a profound impact on rural asset accumulation in most third world countries in many african asian and latin american countries the bulk of the labor force still lives in the countryside in these countries the large difference between expected rural and urban or foreign incomes coupled with the risk reducing functions of migration causes workers to migrate either to urban centers or abroad the remittances defined as the money or goods sent home by migrant workers can have a large effect on the accumulation of assets in these rural areas for example an inflow of external remittances to rural households at the upper end of the income distribution could increase land accumulation by the rich in general terms the effect of remittances on asset accumulation in a rural third world economy depends on answers to three questions a who migrates b how much net income do migrants remit and c what are the marginal effects of these remittances on household consumption and investment because of data limitations in this article i propose to examine only the first and the third questions other researchers have addressed the second issue in the past surprisingly little attention has been focused on the question of the marginal effects of remittances on household consumption and investment in the rural third world this inattention has been due to three considerable methodological problems the first is fungibility because remittances are like any other form of cash income it is difficult to associate this income source with any particular changes in household expenditure behavior the second problem relates to the multiple round effects of remittances on the local economy for example an inflow of remittances into a rural area may lead to a surge in expenditures in housing which may in turn create new income and employment opportunities for the poor and unskilled unfortunately however few studies have

remittances and the dutch disease abstract using data for el salvador and bayesian techniques we develop and estimate a two sector dynamic stochastic general equilibrium model to analyze the effects of remittances on emerging market economies we find that whether altruistically motivated or otherwise an increase in remittance flows leads to a decline in labor supply and an increase in consumption demand that is biased toward non tradables the higher non tradable prices serve as incentive for an expansion of that sector culminating in reallocation of labor away from the tradable sector a phenomenon known as the dutch disease quantitative results also indicate that remittances improve the welfare of households because they smooth income flows and increase consumption and leisure levels a bvar analysis provides results that are consistent with the dynamics of the model

accounting for retail land sales analysis of a mandated change abstract this study assesses the stock market s reaction to a series of events leading up to a mandated change in accounting for retail land sales evidence is found to support the conclusion that the market reacted to some of these events in a manner consistent with the effects of the accounting change on debt annagement contracts a distinctive aspect of the analysis is the efficient use of security returns data to detect market reactions and to derive empirical distributions of test statistics employed the analysis is extended by a model for grouping regression equations known as seemingly unrelated regressions however the gains from this extension are modest

childhood obesity in mexico the effect of international migration this article estimates the effect of international migration from mexico to the united states on the obesity status of children who remain in mexico theory suggests that increased liquidity as well as changing time allocations resulting from migration may influence obesity outcomes natural disasters are used as an identification strategy results suggest that older boys in urban areas are more likely to become obese when either a male or female migrates from the household while girls in urban areas are less likely to become obese both changes in food expenditure patterns and time use changes after migration are likely pathways that affect childhood obesity while there are some changes in food expenditures we find more importantly that urban girls engage in more housework and screen time after migration whereas urban teen boys do not substitute for adult work as much as girls these changes in strenuous activities particularly for girls likely explain the differential effect that migration has on boys and girls obesity outcomes in mexico

controlling for the underreporting of remittances empirical studies that use self reported data on remittances to measure the latter s impact on microeconomic incentives mostly ignore the potential errors associated with reporting measurement issues an econometric procedure to control for these errors is developed and applied to household level data from armenia we find evidence of systematic underreporting of remittances after controlling for this we find a strong negative impact of remittances on incentives to work

non contractible investments and vertical integration in the mexican footwear industry abstract this paper examines patterns of integration among manufacturers and retailers using data from a survey of footwear manufacturers in mexico the property rights framework developed in papers by grossman and hart 1986 j polit econ 94 691 and hart and moore 1990 j polit econ 98 1119 is differentiated from the standard empirical transactions cost framework in the context of this industry the most relevant distinction between the two frameworks is that the property rights framework addresses both the benefits and costs of integration while the transactions cost framework focuses only on variation in the benefits of integration we show that the costs of integration are highest where the retailer s non contractible investment has an important effect on the overall profits from the relationship consistent with the property rights framework the data suggest that integration is less likely in these circumstances

remittances monetary policy and partial sterilization author affiliation diego e vacaflores dv13 txstate edu acknowledgment the author thanks dennis w jansen for his insightful contributions and continuous guidance i also thank the editor kent kimbrough and two anonymous referees for their valuable comments and suggestions 1 introductionremittances have increased over the last several decades international estimates of official remittance flows suggest that the total amount of worker remittances have increased to us 300 billion in 2010 inter american development bank 2012 this increase may in part be attributed to the rapid growth of money transfer institutions which has reduced the average transaction cost and has made them more visible however it may also be indicative of an actual increase in these monetary transfers due to increased migration flows which now represent approximately 45 of net private capital flows to developing countries the importance of remittances for remittances receiving developing countries does not just come from their size but mainly from its potential and actual effects on both the society and the individual remittances affect labor market decisions school retention export sector competitiveness and financial deepening funkhouser 1992 glytsos 2002 cox edwards and ureta 2003 amuedo dorantes and pozo 2004 chami fullenkamp and jahjah 2005 giuliano and ruiz arranz 2009 in terms of consumption remittance flows have gone from satisfying basic needs to providing a vast array of durable goods for recipient households they can thus potentially promote economic growth and development through higher domestic demand if motivated by altruism or through enhanced productive capacity if motivated by self interest most of the literature on remittances focuses on the microeconomic implication of such flows for the sender and for the receiver of these funds on the basis of survey data this trend in the literature has examined the motivations to remit such as contractual arrangements altruism repayment of migration costs and so on and the uses of these funds in the home country e g for education health care entrepreneurial initiatives social works etc at the macro level the literature on the impact of remittances on the recipient country is sparse but growing as researchers realize that it could have important effects on the overall economy however economists have overlooked the examination of the potential influence that higher levels of remittances can have on the implementation of monetary policy and thus its understanding is still limited since remittances provide a secondary income to households they would affect decisions with respect to labor supply and consumption which can alter the effectiveness of monetary policy when this additional income is a significant portion of a household s income additionally although domestic governments usually try to sterilize capital flows to sustain a given policy the high levels of informality in some developing countries and the significant portion of remittances that continue to flow through informal channels make monetary targeting problematic given these potential complications monetary policy could potentially have a differential impact depending on the remittances share of gdp and fluctuations in remittances can affect the amount of money in circulation and therefore economic performance accounting for such influences thus became imperative for stabilization policy this study examines the potentially different impact that monetary policy can have on output depending on the relative share of remittances as a percentage of gdp and the differential effect that remittances shocks can have on the main macroeconomic aggregates when economies do not fully sterilize such inflows channels never explored before it builds on the theoretical model developed by jansen vacaflores and naufal 2010 explicitly incorporating remittances in a small open economy framework and is able to show that monetary policy has a differential effect on output depending on the relative size of these remittances

low pay dynamics and transition probabilities this paper models low pay transitions in britain using a bivariate probit model with endogenous selection to address the initial conditions problem and parental variables as instruments the exogeneity of the initial state is strongly rejected and results in considerable overstatement of the effects of explanatory factors the probability of being low paid depends strongly on low pay in the previous year restricting attention to those who remain employees results in an overstatement of the probability of the low paid moving up the earnings distribution but is not found to have much effect on the estimated effects of explanatory variables

participation in marijuana cocaine and heroin consumption in australia a multivariate probit approach this article investigates factors affecting the participation in marijuana cocaine and heroin using micro unit data from an australian national survey on recreational drugs accounting for cross drug correlation potentially induced by unobserved personal characteristics such as individual tastes and addictive personalities we estimate a trivariate probit model where the participation decisions are jointly modelled as a system with correlated error terms the estimated correlation coefficients are significant across all three drugs the study provides valuable empirical information on conditional and joint probabilities of drug participation the multivariate approach is shown to provide better analysis relative to a univariate approach that does not address the endogeneity of all drug participation variables

consumer choice and competition policy a study of uk energy markets consumer choice is increasingly recognised as a crucial factor in competition policy to illustrate the implications of such choice we present an investment model of the switching choice in the uk residential natural gas market and examine responses to a specially commissioned survey of nearly seven hundred consumers identifying search and switching costs through an assessment of the savings which consumers say they require to switch supplier together with an evaluation of consumer switching behaviour we deduce that the incumbent retained considerable market power suggesting that some continued regulation may be necessary

identifying the efficacy of central bank interventions evidence from australia and japan abstract using a model incorporating the endogenous relationship between exchange rates and intervention we show how a change in central bank policy can be used as an identification assumption estimating this model with simulated gmm for daily data from australia and japan we find that a us 100 million purchase appreciates the australian dollar by 1 3 1 8 but the yen by just 0 2 almost all of the impact of an intervention occurs during the day it is conducted and we confirm that central banks typically lean against the wind

what prompts japan to intervene in the forex market a new approach to a reaction function abstract this paper estimates and analyzes the reaction function of japanese intervention in the foreign exchange forex markets using daily japanese intervention data from april 1 1991 to december 31 2002 a theoretical friction model is adopted to describe the intervention as cost minimizing behavior an ordered probit model consistent with the theoretical model is employed to estimate authorities reaction function a noise to signal ratio is applied in selecting the optimal cutoff point in estimated ordered probit function major findings are as follows 1 a regime change in june 1995 from small scale frequent interventions to large scale infrequent interventions is detected 2 the optimum cutoff is higher in the first half than the second half

are international remittances altruism or insurance evidence from guyana using multiple migrant households abstract while international remittances provide significant disposable income for many households in less developed countries there is no consensus on migrants remittance motivation two principal competing explanations for remittances are altruism and risk sharing this paper employs previously unanalyzed data to bring new evidence to the debate we develop a simple theoretical model that yields distinct testable predictions for each motivation among the model s testable predictions is differential remittance behavior by migrants from households with multiple versus single migrants under altruism and risk sharing our estimation finds significant differences in remittance behavior of multiple and single migrants and these differences support the altruistic incentive to remit

a new method for identifying the effects of foreign exchange interventions central banks react even to intraday changes in the exchange rate however in most cases intervention data is available only at a daily frequency this temporal aggregation makes it difficult to identify the effects of interventions on the exchange rate we apply the bayesian mcmc approach to this endogeneity problem we use data augmentation to obtain intraday intervention amounts and estimate the efficacy of interventions using the augmented data applying this new method to japanese data we find that an intervention of one trillion yen moves the yen dollar rate by 1 7 percent which is more than twice as much as the magnitude reported in previous studies applying ols to daily observations this shows the quantitative importance of the endogeneity problem due to temporal aggregation

evidence on the effect of bond covenants and management compensation contracts on the choice of accounting techniques the case of the depreciation switch back abstract provisions of bond indenture agreements and management compensation contracts are examined to derive testable implications concerning management s incentives to choose among alternative accounting techniques the hypotheses are subjected to empirical examination by investigating the voluntary change from accelerated to straight line depreciation for financial reporting purposes only the methodology utilized incorporates an expectations model of accounting earnings in an attempt to separate out of the effects of earnings announcements from accounting change announcements which are often concurrent the evidence from both price and non price data is not consistent with the general hypothesis that bond covenants and management compensation contracts are important determinants of the decision to change depreciation techniques five potential explanations for the results are offered

an analysis of offer functions of banks and credit unions in guatemala economists have sought to identify institutions which might fill the gap in household access to credit arising from rationing by formal lenders credit unions have been identified as institutions which might use informational and monitoring advantages to fill that gap using information on household perceptions of their access to credit this article analyses the impact of certain credit unions on the access to credit of households in guatemala regression results indicate that credit unions serve markets unserved by formal lenders and that information on household perceptions of their access to credit is important in making inferences about lender lending activities

real time effects of central bank interventions in the euro market abstract this paper investigates the real time effects of sterilized foreign exchange intervention using official intraday intervention data provided by the danish central bank our analysis employs a two step weighted least squares estimation procedure we control for macro surprises address the issue of endogeneity and carry out an array of robustness tests only when the direction of intervention is consistent with the monetary policy stance do we find that intervention exerts a significant influence on exchange rate returns

remittances liquidity constraints and human capital investments in ecuador summary over the last decade ecuador has experienced a strong increase in financial transfers from migrated workers this paper investigates how remittances via trans national networks affect human capital investments through relaxing resource constraints and facilitate households in consumption smoothing by reducing vulnerability to economic shocks our results show that remittances increase school enrollment and decrease incidence of child work especially for girls and in rural areas furthermore we find that aggregate shocks are associated with increased work activities while remittances are used to finance education when households are faced with these shocks 2008 elsevier ltd all rights reserved

mcmc analysis of diffusion models with application to finance this article proposes a new method for estimation of parameters in diffusion processes from discrete observations the method is based on markov chain monte carlo methodology and applies to a wide class of models including systems with unobservable state variables and nonlinearities the method is applied to the estimation of parameters in one factor cev interest rate models and a two factor model with a latent stochastic volatility component sv the cev model is found to do a poor job in capturing the time varying volatility interest rate data the sv model provides vastly superior fit to that of the cev model the article also presents a simulation study that demonstrates that the method provides accurate parameter estimates of the sv model at moderate sample sizes

motivations to remit evidence from botswana in this article a theory of motivations to send remittances is described and tested with data from botswana altruism is one of the motivations tested and found to be an insufficient explanation for remittances among migrants in botswana a refinement of the model stipulates a modified altruism or enlightened self interest in this model the relationship between the migrant and family is tempered by an implicit understanding of mutual benefit the household strategy may be to encourage some members to migrate as a means of spreading risk and sharing gains the household strategy is similar to an insurance policy where migration is to places where market potential is high the risks incurred might be high the example is given of migration during a drought in botswana migrant remittances were greater in households with more cattle or households with more to lose drought alone was not statistically related to remittances increases in remittances were related to increased levels of education it is suggested that repayment was the motive for parents investment in migrants education migrants gains are identified as the potential for an inheritance the security of channeling investments through a trusted family member and security in having a home to return to it is pointed out that the altruism and family remittances from urban migration were strategies that bridged the simple dynamic of either urban development or rural development impacting on family welfare it is suggested that household models of economy adopt some measure to express the relationship of household wealth to remittances from urban migrants

workers remittances and the real exchange rate a paradox of gifts abstract we test the impact of workers remittances on the real exchange rate using a panel of 13 latin american and caribbean countries the analysis reveals that workers remittances have the potential to inflict economic costs on the export sector of receiving countries by reducing its international competitiveness our findings raise concerns parallel to those raised by dutch disease or resource boom models where resource discoveries result in real exchange rate appreciation and shifting of resources from the traded to the nontraded sectors of the economy

the effect of male migration on employment patterns of women in nepal what is the impact of male migration on the labor market behavior of women in nepal the instrumental variable full information maximum likelihood method is applied to data from the 2004 nepal household survey to account for unobserved factors that could simultaneously affect men s decision to migrate and women s decision to participate in the labor market the results indicate that male migration has a negative impact on the level of the labor market participation by women in the migrant sending household there is evidence of substantial heterogeneity based on both observable and unobservable characteristics in the impact of male migration the findings highlight the important gender dimension of the impact of predominantly male migration on the well being of sending households strategies for economic development in nepal should take into account such gender aspects of the migration dynamics

a friction model of daily bundesbank and federal reserve intervention abstract this paper takes a novel approach to derive a central bank intervention reaction function a garch model for exchange rates is amended to allow interventions to have an effect on both the mean and the variance of exchange rate returns an intervention reaction function is obtained by combining the model with a loss function for the central bank estimation results for the implied friction model reproduce the familiar leaning against the wind policy by the bundesbank and the federal reserve furthermore the central banks appear to have reacted to increases in the conditional variance of daily dm returns

food insecurity gender and international migration in low and middle income countries abstract the determinants of migration have been widely studied but research has rarely addressed the roles of food insecurity and gender in the migration decision process to address these gaps we examine these relationships for 135 078 individuals across 94 low and middle income countries we use a series of binary choice models with sample selection and data from the 2014 2015 waves of the gallup world poll survey which includes the first global measure of individual level food insecurity results which are robust indicate that food insecurity is an important determinant of both migration intentions and preparations and the probability of migration intentions increase monotonically with the severity of food insecurity and the probability of migration preparations decrease these relationships also differ significantly by gender and level of gross national income evidence suggests a need for increased coordination between the international food security and migration policy agendas

remittances entrepreneurship and employment dynamics over the business cycle abstract we incorporate remittances and micro entrepreneurship self employment into a small open economy business cycle model with capital and labor market frictions countercyclical remittances moderate the decline of households consumption during recessions these remittances also are used to finance the start up costs of microenterprises that bolster households income during economic downturns we show that the positive income effect from countercyclical remittances also leads to a decrease in salaried labor supply which generates offsetting upward pressure on wages during recessions and adversely affects the recovery of the economy consistent with the microeconomic evidence the behavior of remittances decisively affects labor force participation and the composition of employment between non salaried and salaried employment over the business cycle the model delivers labor market and aggregate cyclical dynamics that are consistent with the mexican data including a highly volatile and countercyclical unemployment rate

internet start ups access to the bank loan market evidence from italy the analysis of the bank sector s ability to efficiently fuel the birth of new italian business ventures in internet related services is studied in particular through the specification and the estimate of a series of econometric models this paper aims at investigating which characteristics of a large sample of internet start ups and their relative founders facilitate access to the loan market more precisely the role played by founders human capital as a possible significant signal used by banks to evaluate investment projects is addressed estimation results suggest that highly qualified human resources possessed by internet founders do not represent an important driver for gaining access to bank credit and they do not affect the amount of the incurred debt

migration from nicaragua some recent evidence abstract i utilize two unique data sources to examine migration from and remittance flows to the capital city of managua nicaragua approximately 10 12 of the population has emigrated these emigrants tend to be disproportionately of working age better educated and more often white collar workers than nonmigrants in addition emigrants are more likely to come from larger premigration households and higher income households remittance flows to managua are quite large the second largest source of foreign exchange earnings after coffee in addition remittances have a negative income effect on labor force participation and a positive effect on self employment of nonmigrants

intraday effects of foreign exchange intervention by the bank of japan abstract we examine the effects of intervention by the bank of japan using intraday data from oct 1 1992 to sept 30 1993 news related to the bank of japan s intervention in the jpy market was retrieved from reuters headlines we find that jpy volatility varies significantly differently across periods from 1 h before to 1 h after reuters intervention reports results from arch models show that intervention by the bank of japan has a positive and significant impact on jpy volatility particularly at high frequencies 5 and 10 min intervals we also find that our intervention proxy has the largest effect upon high frequency volatility 30 to 45 min prior to reuters reports

migration networks and microenterprises in mexico are migration networks associated with lower capital costs or the alleviation of capital constraints we examine these questions with data measuring access to remittance flows among small scale entrepreneurs in mexico using a survey of more than 6000 self employed workers and small firm owners located in 44 urban areas of mexico we estimate the impact of attachment to migration networks on the level of capital investment the capital output ratio sales and profits of microenterprises the impact is identified from the geographic pattern of migration from mexico driven by the completion of rail lines in the early 1900s for the full sample of firms we find that migration is associated with higher investment levels and higher profits but not higher sales the strongest effects on investment are in the categories of automobiles tools and inventories when the sample is limited to firms in high capital sectors investment sales and profits all increase with attachment to the migration networks suggesting that attachment to the migration network alleviates capital constraints in those sectors

migrant remittances and fertility abstractthis study examines the role of migrants remittances in developing countries fertility transition employing an unbalanced panel of south asian countries and controlling for various economic and socio demographic factors we find that remittances are significantly associated with a lower number of children born to women of childbearing age this suggests the remittances substitution effect to be at play rather than the income effect and may result from decreased need for children for financing the household s future needs as well as from better access to healthcare and contraceptive methods available to migrant households remittances association with fertility appears to be more important than the transfer of fertility norms from migrants host countries the monetary aspects of international migration may therefore be more important for the region s demographic transition than social remittances

the roles of destination gender and household composition in explaining remittances an analysis for the dominican sierra two non exclusive hypotheses about what motivates remittances sent by dominican migrants to their rural parents in the sierra are tested a an insurance contract taken by parents with their migrant children and b an investment by migrants in potential bequests results show that the relative importance of these two motives to remit is affected by destination us vs cities in the dominican republic gender and household composition the insurance function is mainly fulfilled by female migrants to the us only when a male is the sole migrant in his household does he play the role of insurer investment by contrast is pursued by both males and females but only among those migrating to the us d 2002 elsevier science b v all rights reserved

dynamic modeling of housing tenure choice abstract in this study a dynamic random effects simultaneous equation model is developed to model household tenure choice decision the novelty of the study lies in accounting for the dynamic aspects of housing tenure mode namely a move is prerequisite to a change in tenure mode and they are determined jointly expected mobility and tenure choice are interdependent decisions and tenure choice may be state dependent i e taste for ownership acquired or reinforced through the experience of being an owner in addition unobservable household heterogeneity is controlled by imposing a random effects specification the estimation is based on panel data from the psid using the method of maximum simulated likelihood

estimating engel curves under unit and item nonresponse summary this paper estimates food engel curves using data from the first wave of the survey on health aging and retirement in europe share our statistical model simultaneously takes into account selectivity due to unit and item nonresponse endogeneity problems and issues related to flexible specification of the relationship of interest we estimate both parametric and semiparametric specifications of the model the parametric specification assumes that the unobservables in the model follow a multivariate gaussian distribution while the semiparametric specification avoids distributional assumptions about the unobservables copyright 2011 john wiley sons ltd

the optimal migration duration and activity choice after re migration if migrants return to their origin countries two questions arise which are of immediate economic interest for both immigration and emigration country what determines their optimal migration duration and what are the activities migrants choose after a return little research has been devoted to these two issues this paper utilises a unique survey data set which records activities of returned migrants we first illustrate the activities of immigrants after returning we show that more than half of the returning migrants are economically active after return and most of them engage in entrepreneurial activities we then develop a model where migrants decide simultaneously about the optimal migration duration and their after return activities guided by this model we specify and estimate an empirical model where the after return activity and the optimal migration duration are simultaneously chosen

mandated accounting changes and debt covenants the case of oil and gas accounting abstract the relationships among mandated accounting changes bond covenants and security prices has been the focus of several studies these studies have provided mixed evidence on the existence of a bond covenant effect on security prices this paper suggests that inconclusive prior results are a consequence of inappropriately measuring the default risk of debt using an option pricing framework it is shown that the debt to equity alone is not an adequate measure of default risk in particular both the debt to equity ratio and the total risk of the firm are necessary to adequately model the bond covenant effects of an accounting change these theoretical propositions are supported by the empirical analysis of the security market reaction to changes in oil and gas accounting

why do migrants remit this paper examines primary incentives of remitting using estimated bilateral data on remittances this paper demonstrates that a rise in the home remittance receiving country s gross national income gni per capita leads to fewer remittances and that a rise in the host remittance sending country s gni per capita motivates migrants to remit more real exchange rates and real interest rates have no effect on remittances these results indicate that altruism is an important and critical component of motivations behind remittances however altruism alone does not appear to be a sufficient explanation of the motivations behind remittances other incentives such as loan repayment and investment play a non negligible role in this regard as well the degree of altruism is higher for migrants from developing countries in comparison with migrants from developed countries and it is higher when we define remittances as personal transfers rather than personal transfers and compensation of employees the results of the vector error correction model show if remittances deviate from the equilibrium relationship they will eventually revert

geographical labour mobility migration or commuting eliasson k lindgren u and westerlund o 2003 geographical labour mobility migration or commuting reg studies 37 827 837 in this paper we examine how individual labour market status and spatial variations in employment opportunities influence interregional job search behaviour and mobility decisions in sweden the econometric analysis is based on 290 000 individual observations and refers to the years 1994 95 the empirical results show that the probability of interregional labour mobility unexpectedly decreases with the accessibility to employment opportunities in neighbouring regions as expected the findings reveal that accessibility to job openings in surrounding regions significantly increases the likelihood of choosing commuting as the mobility mode moreover the empirical findings indicate that individual unemployment experience increases the likelihood of mobility as well as migration eliasson k lindgren u et westerlund o 2003 la mobilite geographique du travail la migration

evidence of the impact of mandatory changes in accounting principles on corporate loan agreements abstract the theory in this paper predicts that mandatory changes in accounting princples can affect the measurement rules defined in restrictive covenants in firms lending agreements consequently those mandatory changes can have an impact on the value of a firm s equity even if the changes appear to be merely cosmetic this contracting cost theory is tested by examining of both event related and cross sectional abnormal performance of the equity of a sample of firms when the accounting princples board changes accounting princples for business combinations the theory provides at best in incomplete explanation of the observed abnormal performance

can parental migration reduce petty corruption in education the income generated from parental migration can increase funds available for children s education in countries where informal payments to teachers are common migration could therefore increase petty corruption in education this hypothesis is tested by investigating the effect of migration on educational inputs an instrumental variables approach is used on survey data and matched administrative records from the world bank s open budget initiative boost from moldova one of the countries with the highest emigration rates contrary to the positive income effect the strongest migration related response in private education expenditure that is found is a substantial decrease in informal payments to public school teachers any positive income effect due to migration must hence be overcompensated by some payment reducing effects a number of potential explanations at the family level school level or community level are discussed several of these explanations ruled out and possible interpretations for future research highlighted

migration remittances and male and female employment patterns little is known about the labor market impacts of workers remittances despite their magnitude in countries with considerable outmigration reports that families receiving international remittances severely curtail their work efforts are fairly common in the popular press e g robert frank 2001 yet we lack rigorous analyses of how male and female labor supplies respond to increases in remittance income to either support or refute these anecdotal observations according to the neoclassical model of labor leisure choice mark r killingsworth 1983 remittances a source of nonlabor income may lift budget constraints raise reservation wages and through an income effect reduce the employment likelihood and hours worked by remittance receiving individuals the receipt of remittances is usually preceded by the out migration of working aged household members however which may induce changes in the labor supply of nonmigrating household members in order to compensate for forgone income or to defray migration related expenses distinguishing the disruptive effect from the income effect of remittance inflows is problematic as most surveys do not contain detailed information on household outmigration and remittance receipt to the extent that these two effects are expected to have opposite impacts on labor supply however we can assess which effect dominates the impact of remittances on the decision to work has been previously examined by edgard rodriguez and erwin r tiongson 2001 in manila and by edward funkhouser 1992 in managua without accounting for the endogeneity of remittances with respect to labor supply they conclude that remittances reduce employment funkhouser also finds that remittances slightly increase self employment while informative these studies focus on the decision to work and do not consider that without altering employment rates remittances may change the hours worked and or the type of work performed in the receiving economy furthermore the impact may be different on male and female labor supplies and responsiveness to remittance income may vary from rural to urban areas using data from mexico a country with a large and growing remittance inflow we address the following questions how does the employment status and hours worked by men and women vary owing to international remittances do male and female labor supplies differ across various types of employment in rural versus urban areas due to higher remittance inflows

the impact of real rents and wages on household formation although the economic literature has analyzed some components of the headship decision study of household formation has been primarily in the realm of demography the authors expand the demographic model to include economic determinants of the decision to remain with parents or not and to live with a group or separately they focus on measuring the effect of spatial variations in rental costs on the probability of forming a household the authors results based on a sample of 2 573 youths in their twenties indicate that the cost of housing and potential labor earnings are important variables in explaining this probability copyright 1993 by mit press

remittances in small island developing states abstract we examine how remittances relate to the exchange rate natural disasters and foreign aid focusing on small island developing states sids using panel var methods we are able to compensate for both data limitations and endogeneity issues while remittances respond to innovations in the macroeconomic variables included in the analysis remittances also have important impacts on these variables furthermore the impact of remittances differs in sids economies relative to the set of all developing economies remittances appear to depreciate the real exchange in sids economies whereas they appreciate the real exchange rate when a broader sample of economies is considered

remittances and labor force participation in mexico an analysis using propensity score matching summary about 2 5 million mexicans migrated to the united states during 1997 2002 and 1 6 million of them sent remittances to their families did recipients change their labor force status in response to these remittances this question has been examined before unlike the previous studies we separate persistent from sporadic remittances and we use propensity score matching to measure differences in behavior we find limited evidence of labor force participation effects of persistent remittances which is broadly consistent with remittances being an integral part of household s income generation strategy

intertemporal analysis of employment decisions on agricultural holdings in slovenia the article attempts to quantify determinants influencing the dynamics of employment decisions on agricultural holdings in slovenia and to test specific aspects of labor reallocation during the transition period by the application of an agricultural household model through the use of a 1991 2000 longitudinal data set for 22 055 farm households quantitative analysis of intertemporal employment decisions by farm holders is carried out using probit techniques the determinants tested relate to the personal characteristics of farm holders gender age education level and potential off farm income household characteristics size structure characteristics of the agricultural holding economic size labor intensity and local labor market conditions the model results generally confirm existing empirical evidence on asymmetrical and irreversible participation of holders on the labor market despite intensive restructuring of agriculture and profound changes in the nonfarm labor market in the analyzed period labor supply of farm holders remains rigid the mobility of labor supply is lower than expected which can be attributed to the importance of structural problems constraining intersectoral mobility low labor mobility reduces the efficiency of labor allocation on agricultural holdings in slovenia elements of this problem emerge on both supply e g low level of educational and professional attainment of reference persons and demand sides of the labor market e g unfavorable local labor market conditions a marked tendency toward maintaining the same employment status is more distinct in the case of holders employed on farm only

intra household labour allocation migration and remittances in rural el salvador abstractmigration can affect labour participation decisions back home either by stimulating work to replace foregone labour or reducing it through the role of remittances using evidence from a r

the effect of remittances on labour supply in the republic of haiti we examine the labour supply effect of remittances in the republic of haiti the prime international remittances recipient country in the latin american and caribbean lac region relative to its gdp unlike previous empirical literature we address three econometric issues that may bias the estimates we account for endogeneity of the remittances with respect to labour supply for the zero inflated nature of our dependent variable hours of work and for the self selection of the migrant sample our results are in line with previous literature and point to a decline of labour supply in the presence of remittances however contrary to previous findings the labour market response to remittances of female household heads is not as sensitive as male s

remittances and economic growth larger impacts in smaller countries this paper examines the impact of remittances on economic growth in small island developing states sids results from variants of an empirical model suggest that while on average there is at best no association between remittances and growth in developing countries there is a positive association between these variables in sids this finding holds for sids in sub saharan africa and the pacific but not for those in latin america and the caribbean relationships between remittances economic volatility and household labour supply are offered as reasons for these findings

comparative effects of migrants remittances on composition of recipient household income in two small island economies we use unique household survey data from fiji and tonga to estimate and compare the combined impact of migration and remittances on the composition of household income a two step methodology is followed employing a migration prediction model followed by the estimation of a three stage least squares 3sls remittances and income equation system we find that remittances contribute to growth in productive capital and entrepreneurial activity in the longer established migrant economy but have yet to impact on business activity in the more recently remittances oriented economy despite it having a more developed market economy in the latter case remittances seem more linked to supporting consumption through supplementing low wage income these findings suggest that the duration and intensity of remittance driven migration and the structure of economic activity within a community are important in understanding the influences of migration and remittances on household resource allocation and production dec

exchange rate effects of central bank interventions an analysis of transaction prices the impact of sterilised interventions by the swiss national bank on the swiss franc u s dollar exchange rate is examined for the 1986 94 period the paper extends results from earlier studies by using the actual prices of interventions based on the fact that all swiss national bank interventions are announced our test exploits the informational differences between interventions and customer transactions a key finding is that only initial interventions matter customer transactions and subsequent interventions have no influence when the bretton woods system of fixed exchange rates broke up in the early 1970s central banks continued to intervene on the foreign exchange market in the meantime a substantial literature has emerged that focuses on the effectiveness of official interventions this literature has been summarised by edison 1993 and almekinders 1995 chapter 3 its central policy issue is whether sterilised interventions defined as interventions that leave the monetary base unchanged can have a significant influence on exchange rate behaviour macroeconomic theory proposes various channels for interventions to operate through but the empirical evidence accumulated over the years is less encouraging it suggests that there is no permanent effect of sterilised interventions on the exchange rate more surprisingly perhaps even shortterm effects are hard to pin down the evidence is weak and sample dependent at best in most cases coefficients are either insignificant or have the wrong sign see almekinders 1995 chapter 6 baillie and humpage 1992 dominguez 1998 dominguez and frankel 1993 klein and rosengren 1991 lindberg 1994 and osterberg and wetmore humes 1995 during the last decade the bulk of the empirical research has concentrated on the analysis of daily or weekly data this line of research which adopts the view that exchange rate markets are highly efficient was stimulated by the decision of the federal reserve board and the deutsche bundesbank to make their daily intervention data available to outside researchers to rationalise the gap between the fragile empirical evidence and the manifest interest paid by the media and other observers to interventions various explanations have been offered in this paper we stress two measurement problems first there is the problem of properly defining the exchange rate change in the regression analysis since intervention exchange rates are not available the

loss severities on residential real estate debt during the great recession abstract this study develops estimates of expected loss severities on mortgage exposures using data from florida during the great recession this paper marks the first attempt at addressing sample selectivity in the context of loss models we also construct measures of home equity that are more accurate than those employed in previous studies we find that failing to address sample selection and the use of noisy equity measures in loss models can bias loss estimates significantly we also find significantly higher loss severities and a greater sensitivity of loss severity to equity than what previous studies report

the economic determinants of the market reaction to proposed mandatory accounting changes in the oil and gas industry a cross sectional analysis abstract this paper examines the economic reasons for the observed negative abnormal common stock performance of firms whose reported earnings and stockholders equity were negatively affected by the proposed elimination of full cost accounting in the oil and gas industry four explanations of the market effects of this mandatory accounting change are examined 1 naive investor theory 2 modified naive investor theory 3 contracting cost theory and 4 estimation risk theory these hypotheses are developed in detail and used to generate variables for a cross sectional model which explains observed return behavior the effect of the accounting change on total stockholder s equity the existence of financial contracts denominated in terms of accounting numbers and to a lesser extent firm size are shown to be important explanatory variables the importance of these variables is consistent with both the contracting cost and estimation risk theories

suspension of payments bank failures and the nonbank public s losses abstract we present evidence on the effects of suspensions of payments from an episode that is close to a controlled experiment for examining those effects in 1861 about 44 of the banks in wisconsin closed 81 of the banks in illinois closed and noteholders suffered substantial losses the historical record suggests that an effective suspension of payments in wisconsin but not in illinois may explain the difference our statistical evidence indicates that the suspension of payments increased the probability of a bank remaining open by about 21 percentage points and decreased noteholders losses by about 14 cents per dollar

a transaction level study of the effects of central bank intervention on exchange rates abstract we study the effects of sterilised intervention operations executed on behalf of the swiss national bank snb using tick by tick transactions data between 1986 and 1995 we extend the preliminary analysis of economic journal 109 1999 662 by matching these data with indicative intra day exchange rate quotes and news wire reports of central bank activity using an event study approach we find that intervention has important short run effects on exchange rate returns in particular among various results we find that i intervention has a stronger impact when the snb moves with the market and when its activity is concerted with that of other central banks and ii exchange rate returns move in the 15 min interval prior to interventions

stock returns and oil and gas pronouncements replication and extension on october 22 1971 the accounting principles board apb tentatively endorsed the successful efforts se method over the full cost fc method of accounting for extractive industries because of the negative reaction to this memorandum no formal opinion was released regarding this issue on july 15 1977 the financial accounting standards board fasb issued an exposure draft which also favored the se technique as the appropriate method this proposal was affirmed on december 5 1977 by the release of fasb statement no 19 the unfavorable reaction to fasb statement no 19 led to the release of accounting series release asr no 253 by the sec reported 8 30 78 which overruled the fasb and indicated the sec s intention to develop a form of the fc method that would be acceptable for sec reporting purposes the fasb subsequently suspended the portion of statement no 19 that required the se method these events were subjected to the typical event type studies in accounting with respect to the 1971 apb memorandum patz and boatsman 1972 found no significant decline in the stock prices of fc firms relative to se firms in the six weeks surrounding the apb announcement in contrast both collins and dent 1979 and lev 1979 concluded that fc stock prices responded negatively to fasb statement no 19 however dyckman and smith 1979 and haworth matthews and tuck 1978 did not feel their evidence was strong enough to warrant such a conclusion for 19 collins rozeff and dhaliwal 1981 also found that firms whose financial statements were deemed materially affected by the

the sec reversal of fasb statement no 19 an investigation of information effects it has become popular in recent years to assess the economic consequences of new financial reporting standards and disclosure requirements as reflected in stock price behavior while the motivation for such studies seems to be generally accepted there are serious problems both in designing studies to assess the capital market reaction to new accounting rules and in subsequently interpreting the results for policymaking the difficulties are largely due to the lack of tight models of how new financial accounting standards board fasb standards and securities and exchange commission sec releases should impact investor decisions within the context of efficient markets this generally leads the researchers to test for average abnormal stock returns upon the announcement of a new accounting rule across a sample of firms subject to the rule this empirical approach is exposed to two major dangers first the intrusion of confounding events can easily lead to rejection of the null hypothesis of no price response due to both the very general nature of the alternate hypothesis of average abnormal returns and the single event date

stock price effects of the allowance of lifo for tax purposes abstract i investigate stock price behavior associated with the allowance of lifo for tax purposes the analysis is structured as an event study of the revenue acts of 1938 and 1939 the results indicate a positive net market reaction to legislative events leading to lifo s incorporation into the us tax code for the sample firms having the largest estimated lifo tax benefits i conclude the market revised its probabilities that firms most likely to benefit would avail themselves of the opportunity to use lifo and defer taxes on inventory profits

remittance receipt and business ownership in the dominican republic using household level data from the dominican communities in the latin american migration project lamp dr7 we examine the links between remittance receipt and business ownership we find that while the existence of a family business attracts remittance inflows these monetary funds are associated with a reduced likelihood of business entrepreneurship these results are consistent with various hypotheses regarding remittances and business investments first remittances may be motivated by the availability of investment opportunities in the home community second remittances may respond to a bequest motive on the part of the emigrant who may wish to lay claim on family assets when returning home lastly remittances may cause an income effect that reduces family labour force participation and correspondingly the likelihood of family run business investments

remittance income volatility and labor supply in mexico author affiliation catalina amuedo dorantes camuedod mail sdsu edu corresponding authorsusan pozo susan pozo wmich edu acknowledgment we would like to thank the anonymous referees and the editor for their comments and suggestions on how to improve the manuscript 1 background and significancea significant body of academic and policy research analyzes the impact of international remittances the earnings that emigrants send home in economies around the globe studies have been carried out to ascertain the effect of remittances on a wide range of economic outcomes including household decisions concerning capital accumulation health and housing expenditures country exchange rates economic growth income distribution poverty rates and as we do in this study labor supply evidence of the impacts of remittances on the well being of recipients and on economic progress is mixed some studies find that countries and households reap positive benefits from these resource transfers e g adam and page 2005 while others find negative or ambiguous effects e g narayan narayan and mishra 2011 an overall consensus on the impacts of remittances is unlikely to emerge for some time given the complexity of this research topic not to mention the varying characteristics of countries under analysis 1we propose to contribute to this important debate using an expanded approach for assessing the effects of remittances on individual and household decision making our contribution is to note that while the level of resource transfers received by the household is likely to influence individual and household behaviors volatility with regard to the stream of inflows is also likely to play an important role to date research on the impact of remittances on remittance receiving households has tended to focus on the way in which the level of remittance inflows affects either individual or household behavior without considering the volatility surrounding these inflows however if the volatility that surrounds remittance inflows influences individual and household behaviors a strategy that only examines the level of inflows is likely to miss out on a more complete understanding of the effects of remittances on individual and household decision making and therefore of their impacts on remittance receiving economies amuedo dorantes and pozo 2010 in this study we focus on the labor market and investigate how volatility of remittance inflows influences male and female labor supply a crucial dimension in the influence of remittances on remittance receiving countries limited numbers of studies have examined the impact of the incidence and level of remittance income on labor supply patterns although conclusions differ owing in part to the various data sources and methodological approaches being used a majority of the studies have concluded that the receipt of remittances results in labor supply reductions for instance rodriguez and tiongson 2001 report that remittances lower employment in the philippines while funkhouser 1992 estimates that remittances reduce the employment likelihood of nicaraguan men and women by 2 and 5 percentage points respectively studies by amuedo dorantes and pozo 2006 and hanson 2007 found that the impact of remittances on the labor supply of mexicans is conditioned on gender they conclude that mexican women reduce labor supply on account of remittance inflows whereas men do not in contrast limiting their study to mexican households that receive persistent remittances cox edwards and rodriguez oreggia 2009 conclude that remittances have no impact on the labor supply of household members remaining in mexico with the exception of urban women in traditionally low migration states for whom labor supply rises however we still lack an understanding of the ways in which the volatility in remittance inflows can impact labor supply in remittance receiving countries

undocumented mexico u s migration and the returns to households in rural mexico this paper presents estimates of net income gains to a sample of households in rural mexico from sending migrants illegally to the united states correcting for sample selectivity bias and it examines the role of expected income gains in driving illegal mexico u s migration there is no evidence that people who migrate illegally to the united states are above average contributors to household income either as workers in mexico or as mexico u s migrants however other things being equal villagers who are in the best position to contribute to household income as workers in mexico are positively selected not to migrate to the united states

remittances output and exchange rate regimes theory with an application to latin america immigrant remittances have a broad effect on the receiving economies we show this impact on the main macroeconomic aggregates is dependent on the policy arrangements in place that manage capital flows we look at remittance inflows in a small open economy to examine their influence on output under alternative exchange rate regimes using a simple stochastic limited participation model we are able to reproduce dynamics consistent with the empirical literature we find that the dynamics of labor inflation and output are dependent on the parameterization of the utility function and on the monetary rule governing the evolution of the interest rate and in particular with respect to the response of interest rates to exchange rate movements we find that the initial drop of output resulting from a remittances shock is similar under alternative exchange rate regimes but the subsequent recovery of output is faster and stronger under more flexible exchange rate regimes we provide suggestive empirical evidence from a panel vector autoregression specification for 17 latin american countries that corroborates our results