When x is small, due to the concavity of R, investing in remittances yields higher marginal returns in case of return migration than savings: for r sufficiently close to zero, R o ′ r is larger than τ.
The results of the Tobit model with and without the index are shown in Table 6 when considering only the subsample of all migrants, but distinguishing between temporary and permanent migrants.13 The dependent variable is the amount of monthly savings, and this also includes remittances in the case of migrants.
Vasco (2013), studying migration and remittances in the case of rural Ecuador finds that "neither migration nor remittances have any effect on the odds of a household owning a rural business" (Vasco 2013: 37).
First, it allows us to provide an explanation to the poor performance of some return migrants.18 Second, it shows that remittances, although they are more productive in case of return migration, increase the conditional expectation of consumption of migrants settling in the host country.
While remittances can obviously not be negative, borrowing is precluded by the migrant's lack of credibility to repay a loan in case of return migration.
-- A significant portion of remittances, in many cases the majority, was spent on food, clothing and other daily essentials.
Finally, let us analyze the impact of remittances and savings in the case of risk averse migrants when prices differ across locations.
This need not be interpreted as wealthier nurses being less altruistically inclined than others, but simply reflects a similar phenomenon to target saving, where, in the case of remittances, once a migrant has achieved a certain target level of family support, remittances no longer rise with income.
This saves billions of dollars that are usually lost to intermediaries, particularly in the case of remittances sent home by workers abroad.
