After discussing the Malawian context and summarising the remittance research, I focus
on remittances in rural Malawi. I follow remittances from the giver’s motivations through
to the receiver’s view of remittances and how the receiver uses them and finally to their
impact as a means of moderating the effect of negative shocks on the receiving household.
Results show that parents remit to respondents for altruistic purposes, or for insurance
motivations (e.g. to help out the respondent if they are sick). Respondents remit to
parents for altruistic motivations and inheritance. There is strong bi-directionality in the
remittance flows. Children remit to respondents as an “insurance premium”, and for
inheritance motivations. Altruism motivates respondents to give to their children. There is
strong evidence of co-insurance between respondents and their siblings with both
insurance payouts and premiums being paid. Respondents and their siblings also remit to
each other for altruistic motivations.
There is strong evidence of “mental accounting” amongst both male and female headed
households. Remittances exhibit a much lower MPC than salary and farming income. Male
and female headed households differ in their use of income from different sources,
however one result is consistent: remittances are used for education.
Probit models indicate that households are more likely to receive remittances from local
areas if someone in the household is sick (local remittances insure a health shock).
Households that suffer from drought are more likely to receive remittances from more
distant areas (other districts, a city, abroad). Drought has a major negative impact on
consumption levels but distant remittances insure affected households who suffer from
these. Local remittances, which make up most remittance flows, are unable to insure
these community shocks. Only around 10 per cent of households receive remittances from
outside their home district however. Remittances help to insure household consumption
against health shocks, but only food consumption is insured.
|Date of Award||1 Sep 2008|
|Supervisor||Joshy Easaw (Supervisor) & Atanu Ghoshray (Supervisor)|
- household economics
Essays on remittances in rural Malawi
Davies, S. (Author). 1 Sep 2008
Student thesis: Doctoral Thesis › PhD