Motives and Giving Norms Behind Remittances: The Case of Filipino Overseas Workers and their Recipient Households 

The literature has focused on motives to explain remittance behavior. But as nonanonymous
transfers, remittances are apt to be influenced by giving norms as well. We formulate an
empirical specification that takes account of remittance motives involving workerhousehold
pairs. We find that altruism dominates the exchange motive among overseas workers who are
likely to be the primary breadwinners of their recipient households. We also find that, in the
subsample in which overseas workers are likely to be secondary breadwinners, (a)household
labor income is an endogenous explanatory variable and(b) the error covariance of the
householdincomeandremittanceselectionequationsispositive.Apossiblereasonfor(a)isthat
secondarybreadwinnersusehouseholdincomeasanimperfectsignalofopportunitycostorto
detectunobservedeffort,i.e.,moralhazard,ingeneratingincome.Asfor(b),wesurmisethatit
indicates the presence of incentivecompatible mechanisms against moral hazard. On giving
norms,wefindthat,insamplesthatincludeoverseasworkerswhoaresecondarybreadwinners,
remittance amounts are afflicted with negative selectivity. We present evidence that this is
consistentwithFilipinogivingpractices,inwhicheveryonegivesbutinmodestamounts.