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From the ECV‐4, the previous round of the survey, we construct the variable "Remittances in the community in 1999" which is the proportion of remittance receiving households in the community in the year 1999.
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As such an experiment is not possible, the problem of endogeneity arises, i.e. the variable remittance receipt is correlated with the residual.
In the second part of the analysis, the indicator variables for remittances and labor supply are replaced by the natural logs of the observed values plus one, such that Eqs.
The household variable No Remittance describes households that had not received remitted income from abroad in the past year.
Third, as has been shown, after controlling for income and all other variables nurses remittances do not decrease with duration of absence, unlike other groups whose remittances decline markedly as their length of absence increases.
Table 1 presents the descriptive statistics for the children, parent, and household variables by remittance reception status.
In Table 5, it can be seen that the signs and significance of the variables determining remittance receipt are consistent with those of the 2SLS model.
The endogenous variable of interest, remittances, is instrumented via four variables.
Recent studies include a remittances variable as a regressor in a system of household demand equations (e.g. Zarate‐Hoyos ( 2004 ), Taylor and Mora ( 2006 ) and Adams and Cuecuecha ( 2010 )).
Having already determined that the uncorrected OLS model is appropriate for our analysis, a major concern is that its parameters may not be identified because the variable measuring the remittances of other sibling migrants may be endogenous due to a simultaneity bias.
The resulting remittance model was designed theoretically, identifying the variables which determined remittances and their dependence relationships, and then developed into a computer cluster.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com