No.5 How Altruism Works during a Pandemic: Examining the Roles of Financial Support and Degrees of Individual Altruism on International Remittance

While the importance of international remittances has been recognized globally, understanding how public subsidies and the degree of individual altruism affect remittance behavior remains limited. Although international remittances were predicted to decline drastically in the early stages of the COVID-19 pandemic, remittance data proved that they were ultimately resilient to the anticipated negative shock of 2020. Potential reasons include altruistic motivations among migrants and economic stimulus programs in large economies; however, a detailed investigation from a micro-perspective is lacking and urgently needed. This study examines the impact of financial support in host and home countries. It also examines the individual impact of altruism on international remittances using unique data from foreign care workers in Japan. Our panel data estimation shows that emergency cash transfers from the host country positively affected migrant remittance amounts; however, no crowding-out effects were observed due to subsidies from home governments. The heterogeneous analysis also reveals that highly altruistic remitters were more likely to send money home after receiving cash transfers in the host country. The results support the claims of international organizations that the resilience of remittances was supported by altruism and public financial support during the pandemic.

Keywords: International remittance; Altruism; Japan; COVID-19; Cash transfers