Do Social Transfers "Crowd-Out" Remittances: Evidence from Bosnia

By: Oruč, Nermin.

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BookSeries: wiiw Balkan Observatory Working Papers: 92Publisher: Wien : Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw), 2011Countries covered: Bosnia and HerzegovinaOnline resources: Click here to access online Summary: This paper presents the results of estimation of the model of interaction between social transfers and remittances. Compared to previous studies, this paper estimates non-monotonic “crowding out” effect by an innovative empirical model specification. The model is then estimated by the two-stage Heckman’s selection method, where the receipt of remittances is the first stage, and amount of remittances received second stage dependent variable. The findings suggest that social transfers crowd-in remittances and that the predominant motive for sending remittances to Bosnia is exchange. In addition, the results do not support the Cox (1997) hypothesis about non-monotonic transfer motives.

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Item type	Current library	Call number	Status	Date due	Barcode
Paper	WIIW Library	92 (Browse shelf(Opens below))	Available		1000010003201

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This paper presents the results of estimation of the model of interaction between social transfers and remittances. Compared to previous studies, this paper estimates non-monotonic “crowding out” effect by an innovative empirical model specification. The model is then estimated by the two-stage Heckman’s selection method, where the receipt of remittances is the first stage, and amount of remittances received second stage dependent variable. The findings suggest that social transfers crowd-in remittances and that the predominant motive for sending remittances to Bosnia is exchange. In addition, the results do not support the Cox (1997) hypothesis about non-monotonic transfer motives.

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