Fortune, Risk, and Remittances: An Application of Option Theory to Participation in Village-Based Migration Networks.

Altruism, insurance, and investment are three potential motives for migrant remittances that have been explored in the literature. The model developed in this paper posits an additional motive - that remittances are necessary for the migrant to participate in the employment networks that are based in the village, and thus are partially a payment for the option to change jobs within this network. The model is tested with data on Mexican migrants to the United States and finds support in that network strength and diversity increase remittances, whereas the insurance motive predicts stronger networks will decrease remittances. [ABSTRACT FROM AUTHOR]