Working Paper, Federal Reserve Bank of Chicago 2008-19
I analyze remittance behavior among new legal immigrants in the US using the 2003 New Immigrant Survey (NIS), a nationally representative survey of immigrants admitted to legal permanent residency in 2003. I use the NIS to address data limitations common to empirical remittance studies, such as low sample sizes, missing information on the donor or recipient and the absence of data which includes immigrants from many countries. Looking first at the distribution of remittances, I find that it is skewed to the right, with a small number of immigrants sending very large amounts. I then analyze the determinants of remittances among new immigrants and estimate remittance-income elasticities. From this analysis, I find evidence that the motivations to remit are not purely altruistic and may include the desire to invest in the home country. I then discuss how future work will re-examine this investment motivation and its relationship to return migration by incorporating later waves of the 2003 NIS to form panel data. Finally, I find that large country differentials in remittance behavior are only partially explained by observable characteristics of the donor, recipient and origin country.