Return migration intentions

Return migration is not an overnight action rather it is a process to which intentions for exercising it are a fundamental component for the whole process. This is unlike the cases for involuntary or forced migration conditions where migrants do not have any choice for intentional decision making. The linkages of return migration option with other migration stages also reflect the vital role of return migration intentions in determining the migrant’s behaviour at different migration stages. Being a fundamental component of the whole return migration process, determinants of return migration could also be viewed as the determinants of return migration intentions. The only difference is the time factor involved, which remains uncertain for many of the immigrants which causes them to keep prolonging their stay in the destination places. Such repeated procrastination of return migration by intending immigrants cannot be explained by individual or macroeconomic events (ibid.).

This means that the presence of the reasons responsible for developing return migration intentions of immigrants cannot guarantee the corresponding return migration of the migrants at the same time. Actual return migration could take place at some later time, even when those initial reasons might not be present any further in the migrant’s settings.

But there is very little literary insight available about the corresponding transnational practices performed at the same time by the immigrants in response to such developed return migration intentions (because of the presence of the reasons in the overall setting of the migrant’s destination places). This theoretical debate provided me another starting point to explore the transnational practices performed by immigrants influenced by return migration intentions, which might have developed during the global economic crisis time.

The uncertainty element regarding the time span for an immigrant to actually evolve into a return migrant makes it return illusion for some immigrants as it might happen that they end up with permanent settlement in the destination places. However return migration intentions, whether practiced or not, have profound impacts on increased remittances and investments under self-interest and back home self-integrating motives. International migrant groups that have return intentions remit greater amounts of money as compared to those migrants without return intentions. This could be viewed as a part of their return migration preparedness strategy to enable an actual return at specific or uncertain yet suitable time for them in the future. The time element for many of the immigrants having return migration intentions remains uncertain and also depends on their migration stage and set targets. Figure 2.5 visualizes the presented debate on return migration and shows that the process of return migration starts with return migration intentions.

2.2.5 Remittances

It is important to review the literary debate surrounding the topic of remittances as immigrants use remittances as one of their main instrument for practicing many

21 Figure 2.5: Return migration process

Source: Own construct

transnational practices in the origin countries. According to the International Monetary Fund (hereafter referred to as IMF 2009: 272), remittances are part of household income from foreign economies mainly due to the temporary or permanent migration of people to those economies. IMF (loc. cit.) defines that “remittances are cash and noncash items that flow through formal channels, such as via electronic wire, or through informal channels, such as money or goods carried across borders”. IMF (2010, as referred to by World Bank, 2011:

xvi-xvii) categorised remittances as i) workers’ remittances (money transferred to home countries by migrants residing in the host country for a year or more), ii) compensation of employees (money transferred by migrants living in the host country for a period of less than a year) and the iii) migrant’s transfers (the net wealth of migrants transferred at the time of changing their country of residence for at least a year). This categorisation was introduced by the IMF in order to bring consistency to the recording of remittance data throughout the world.

Although the definition of remittances presented by the IMF includes the transfers made through informal channels, the most difficult and challenging part is to record or estimate remittance values (World Bank, 2011: xvii). Freund and Spatafora (2005) found that around 35–75 percent of official remittances to developing countries are sent through informal channels. This problem persists even with remittances sent through formal channels, as in some countries, there is no practice of recording remittances sent through money transfer operators, post offices and other emerging channels like mobile money transfers (World Bank, loc. cit.). The World Bank (loc. cit.) suggested a way forward to deal with this problem by conducting randomized and representative surveys with senders and recipients as the household surveys alone could not give comprehensive results. As this study is investigating the transnational practices performed by long-term immigrants, the relevant category of remittances under investigation is the workers’ remittances only.

Further, it attempts to record all remittances made through formal and informal channels by the Pakistani immigrants during a period of five years from 2008 to 2012.

Return migration intentions (RMI)

Uncertainty w.r.t.

time factor

Return migration preparedness strategy

Increased remittances/

investments

Return migration

Revision of RMI execution time

International migrant Return migrant

Chapter 2 Development and Migration: Theoretical and Conceptual Debate

22 Determinants of remittances

Lucas and Stark (1985, as referred to by Hagen-Zanker and Siegel, 2007; Ulku, 2012) described determinants of remittances as pure altruism, pure self-interest and tempered altruism or enlightened self-interest. The remittances under pure altruism are made for the care and welfare of those family members left behind in the home country (Johnson and Whitelaw, 1974; Lucas and Stark, 1985, as referred to by Ulku, 2012). The remittances influenced by pure self-interest are generally sent back by immigrants under return intentions and close connections to the home country for inheritance security, asset accumulation, and physical and social capital investments (Hoddinott, 1994; and Lucas and Stark, 1985; Bernheim et al., 1985; Stark, 1995, as referred to by Ulku, 2012). The tempered altruism or enlightened self-interest model suggests that the remittances are made under undocumented contractual agreements for mutual benefits of multi-located household migrants and non-migrant members. The main motives for such agreements are risk sharing and insurance, implicit loan contracts and exchange of services on reciprocal basis (Poirine, 1997; and Lucas and Stark, 1985, as referred to by Ulku 2012).

While the above theoretical categorisation of determinants of remittances is understandable, it is very difficult to differentiate between them in a practical sense as in many cases, remittances are not determined by a single motive (Holst and Schrooten, 2006).

One of the other associated problems is that many of the studies on remittances have been done through area studies either on the sending or on the receiving end. Thus they do not give a full picture of the motivations behind remittances. Also, the problem remains with the methodological approach towards addressing the issue which most of the time remained quantitative with statistical and econometric analyses. Another noted literature problem is that a differentiation has not been made between the remittance motivation of the sender and the actual remittance usage by the recipient. This is also worth differentiating as remittances sent for general consumption purposes by migrants might be used for investment purposes by the recipients and vice versa.

The literature describes many other factors which relate to the motivational models of remittances. Hagen-Zankar and Siegel (2007) provided a candid analysis of the past studies on the subject matter and explained how these factors have been used to make a differentiation among the determinants of the remittances. They identified those factors as household (recipient) income, migrant income, household shock, migrant risk level, education level of migrant, return intention, the number of migrants in household and time/age. Further, they classified these factors in a matrix to show their relation with different determinants of the remittances. According to their presented matrix, there is a positive relation between return intention and pure altruism. This means that if migrants remit more under return intention, the motivational reason would be purely altruistic while the study of immigrants in Germany conducted by Holst and Schrooten (2006) found that the motivational reason for increased remittances under return intention is personal investments. So, this study has also been hypothesised in line with the findings of Holst and Schrooten (2006). Furthermore, it investigates the remittances and practices performed under the determinant of return migration intentions as a meaningful way to add information to the current theoretical understanding.

The literature shows that there are many other micro and macro level determining factors which affect the probability and the level of remittances. These determinants explain the differences in the remitting behaviour of the migrants. By referring to the many past

23 studies (total 13 in number) on the subject of determinants of the remittances conducted by many scholars, Hagen-Zankar and Siegel (2007) grouped together common variables to identify their relation with the probability and the level of remittances. The results showed that they were only able to find a common ground for only two variables, i.e. migrant income and family reunification for which all the past conducted studies have shown a unidirectional relation of these variables with the probability and the level of remittances.

Table 2.2 provides a summary of their findings and depicts that the remaining other variables have either shown a different directional relation among the studies or no relation at all to the probability and the level of remittances. This variation was due to the fact that all those studies on international migration and remittances have been done with different settings and with different methodologies.

Table 2.2: Effects of the variables on probability and level of remittances by migrants Common variables studied Studies

showing a

‘+’ relation

Studies showing a ‘–

‘ relation

Studies showing ‘no’

relation

Studies, which didn’t test/

have no finding Number

Income 6 - - 7

Gender (base male) 3 1 2 7

Marital status 2 1 3 7

Age 5 - 5 3

Education level 4 - 5 4

Risk level 2 2 - 9

Migration duration/ time 4 2 5 2

Family reunification - 3 - 10

Migration cost 2 - 2 9

Household (HH) (recipient)

income - 4 2 7

HH (recipient) wealth 3 3 1 6

Number of HH members (recip.) 2 - 4 7

No. of other migrants in HH - 3 3 7

HH Shock 2 - 3 8

Source: Hagen-Zankar and Siegel, 2007, summarised by author

However, Holst and Schrooten (2006) tested some other variables to additionally investigate their effect on the probability and the level of remittances. The other variables were integration into the host society, employment, ownership of real estate in the destination place, nationality/citizenship, home visits, return intentions and migrants own household size in the destination place. For this study, the relevant result from their investigation was that they found a positive relation between return intentions and, the probability and the level of remittances. Similarly, Hagen-Zankar and Siegel (2007) also identified common variables used in the various past studies (total 17 in number) to group macroeconomic determinants of the level of remittances. Their determinant list included the number of workers, wage rate/earnings, economic situation in the host country, poor economic situation in the origin country, exchange rate, interest rate gap, political risk, infrastructure to transfer funds and macroeconomic instability in the home country. Their synthesis of results showed that immigrants remit more money in the case of a poor economic situation of the origin country, which has been found under the motive of altruism and risk sharing

Chapter 2 Development and Migration: Theoretical and Conceptual Debate

24 purposes. But this study explores a relation of sending remittances under return intentions which could be merged with pure self-interest model or with tempered altruism/

enlightened self-interest model.

Holst and Schrooten (2006) also pointed out another shortcoming of many of the studies available on remittances that their target group of migrants comprised of foreigners only in the host countries instead of a broader group of persons with migration background.

Moreover, they discussed that remittances have been constantly viewed as either in the theoretical frame of new economics of labour migration or as the livelihood strategies of households, thus missing the emerging theoretical frame of transnational lifestyles of migrants to explain their remitting behaviours. This study is an attempt to address these shortcomings by using a mixed method research approach through which motivational reasons behind remittances and the carried out practices are investigated in a qualitative manner.