Immigration Policy and Remittance Behaviour

35 Pages Posted: 31 Aug 2017

See all articles by Matloob Piracha

Matloob Piracha

University of Kent - Department of Economics; IZA Institute of Labor Economics

Massimiliano Tani

University of New South Wales - Australian Defence Force Academy; IZA Institute of Labor Economics

Guy Tchuente

University of Kent

Abstract

This paper analyses the impact of a change in Australia's immigration policy, introduced in the mid-1990s, on migrants' remittance behaviour. More precisely, we compare the remittance behaviour of two cohorts who entered Australia before and after the policy change, which consists of stricter entry requirements. Our empirical strategy uses conditional difference-in-differences in the presence of interactive fixed-effects. We first show that Bai's (2009) least squares estimator and conditional difference-in-differences are biased if used on their own. We then derive conditions that are required to obtain a consistent estimator using a combination of conditional difference-in-differences and Bai's (2009) least squares estimator. The results indicate that those who entered under more stringent conditions – the second cohort – have a higher probability to remit than those in the first cohort, though the policy change has no discernible effect on the level of remittances.

Keywords: immigration, treatment effect, difference-in-differences

JEL Classification: C13, F22, F24, J61

Suggested Citation

Piracha, Matloob and Tani, Massimiliano and Tchuente, Guy, Immigration Policy and Remittance Behaviour. IZA Discussion Paper No. 10927, Available at SSRN: https://ssrn.com/abstract=3029797

Matloob Piracha (Contact Author)

University of Kent - Department of Economics ( email )

Keynes College
Kent, CT2 7NP
United Kingdom

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Massimiliano Tani

University of New South Wales - Australian Defence Force Academy ( email )

Sydney, NSW 2052
Australia
+612 6268 8512 (Phone)
+612 6248 8450 (Fax)

HOME PAGE: http://www.unsw.adfa.edu.au/sbus/staff_cvs/about_max_t.html

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Guy Tchuente

University of Kent ( email )

Keynes College, University of Kent
Canterbury, Kent CT2 7NP
United Kingdom

HOME PAGE: http://https://www.kent.ac.uk/economics/staff/profiles/guy-tchuente.html

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