International migration and remittances to a Lebanese village

Remittances are an important source of income for many labour-exporting Third World countries, especially for rural communities. Based on a theoretical framework developed by Lucas and Stark (1985) and Stark and Lucas (1988), a number of hypotheses concerning remittances from foreign emigrants are developed and tested using questionnaire survey data from Lala, a Lebanese village. According to the theory, a rural family engages in an implicit insurance-type contract with the potential migrant because both are averse to risk. A family interested in adopting new but risky agricultural technology in vests in the emigration of one of its members and insures him or her against possibilities of unemployment or other uncertainties. Once established abroad, the migrant is expected to reciprocate by remitting and thus insuring the family against unforeseen agricultural adversities. An emigrant is deterred from defaulting on the implicit contra ct because of a desire to inherit the parent's wealth a nd a need to maintain contacts with residual family members who help to administer and oversee a migrant's investment in the village, to maintain a sibling's reputation, and thus facilitate his or her return and reintegration into the community. Results from testing the hypotheses are somewhat consistent with the proposition that, after a period of adjustment, migrants do begin to remit, thereby providing their families with an insurance against the uncertainties of life in the country of origin. However, the level of remittances does not appear to depend on the potential to inherit from a family's wealth. Moreover, families do not seem to in vest in their migrants so as to improve their farm lands and to undertake risky agricultural techniques. The long-term remittance commitment of migrants to their residual families suggests that migrants' altruism may be a more significant motivating factor than self interest.