REMITTANCES FROM INTERNATIONAL MIGRATION - A COMPARISON OF EL-SALVADOR AND NICARAGUA

I use household data from El Salvador and Nicaragua to examine the determinants of remittances from international migration. Nearly twice as many households in San Salvador, the capital of El Salvador, receive remittances from relatives abroad than do households in Managua, the capital of Nicaragua, and of those who receive remittances, the average remittance received in San Salvador is over double that in Managua-$119/month to $45/month. I find that the role of observable characteristics in explaining differences in the level of remittances, accounting for the self-selection in the decision to remit, is not large. The difference is explained by differences in the behavioral coefficients and by differences in the self-selection bias of those who remit out of the pool of emigrants between the two countries.