Migration, Remittances and Asset Allocations of Spanish Immigrants

Catalina Amuedo-Dorantes, San Diego State University
Susan Pozo, Western Michigan University

The popular literature characterizes international remittances as purely altruistic. Migration scholars, however, recognize that remittances are also sent for other reasons, e.g. loan repayment, asset accumulation, or insurance purposes. Yet, few empirical studies document these motives. Specifically, a finding in the literature that remittances rise following currency depreciations has been attributed to the increase in purchasing power of remittances in the home country, which motivates migrants to send more. An alternative explanation may be that migrants re-allocate their assets following a change in relative market returns. Our aim is to distinguish and document these two alternative explanations using a new and representative Spanish immigrant survey to assess the extent, if any, to which migrants reconfigure their asset allocations in response to currency depreciations. The analysis will improve our understanding of factors driving migrant remittances and the reliability of immigrant remittances during economic downturns.