Remittance behaviours of foreigners in Italy

Abstract

This article investigates the determinants of remittance behaviours among foreigners in Italyand intends to gain a better understanding of the temporal pattern of remittances. The analysisis based on data from the 2009 “Italian Statistics on Income and Living Conditions of House-holds with Foreigners”. The decisions on whether to remit and how much to remit are sepa-rately yet simultaneously estimated using a zero-inflated beta regression model. The findingsreveal that remittances are driven by a mix of altruistic and self-interest motives that may per-sist for many years. Many covariates included in the model have a different effect on thepropensity to remit and on the relative amount of remittances. We find some evidence that theaverage propensity to remit follows an M-shaped trajectory over time. However, the modelspecification including only time and time squared proves that the inverted-U shape trajectory,well-established in the literature, still remains a better choice in terms of parsimoniousness andflexibility. Among those who remit, time since migration does not have any significant effecton the normalized amount remitted.