The effect of remittances on return migration and its relation to household wealth: The case of rural Thailand.

This paper examines the effect of remittances on return migration as it relates to household wealth. Using longitudinal data from Nang Rong an agrarian district located in Thailand’s north-eastern region the authors find that migrants’ sending of remittances is positively related to return migration but only when the amounts remitted are small. The authors argue for a signaling motive whereby the migrant sends money to the household to keep open the return option by maintaining membership rights in the origin household. They also find that the relationship between remittances and return migration only exists for migrants from households in the middle of the wealth continuum. Remittances from migrants of poorer and wealthier households are not related to return. Differences between households at various levels of wealth may reflect the need for remittances intentions to return a need for coinsurance or the absence of a household strategy altogether. Findings from this paper suggest that while a household economics approach may be more practical in describing strategies pursued by rural-to-urban migrants in developing countries theorists and policymakers may need to pay more attention to the different types of motivations followed by migrants and households at various points on the wealth continuum. Future work needs to be done to determine what types of migration motivations are undertaken by poorer households. Also policymakers should notice that only a small number of migrants return. Therefore policy efforts should focus on helping migrants at their destination especially if they are living in slum housing or working in hazardous occupations which may require better access to medical care.