Remittance behaviour of recently arrived immigrants to Australia: an empirical analysis Giulia Bettin 1 , Riccardo Lucchetti 2 , and Alberto Zazzaro 3 1 HWWI - Hamburg Institute for International Economics - Hamburg, Germany bettin@hwwi.org 2 Dipartimento di Economia - Universit` a Politecnica delle Marche - Ancona, Italy r.lucchetti@univpm.it 3 Dipartimento di Economia - Universit` a Politecnica delle Marche - Ancona, Italy a.zazzaro@univpm.it First draft 1 Introduction Remittance flows represent a major source of income and foreign exchange rev- enue for many developing countries. The purpose of this empirical work is to analyse remittance behaviour of migrants, its peculiarities and main motivations considering what happens at microeconomic level. Macroeconomic analyses of remittances’ phenomenon are usually built on aggregate data from countries’ Balance of Payments and need to take care of the fact that these measure only official flows of remittances, while the huge amounts of money transferred through unofficial channels are not taken into account. This shortcoming is less affecting survey data employed in microeconomic studies; information on remittances are collected there regardless the channel used to send them in the country of origin. Remittance behaviour of immigrants is usually analysed as a function of migrants’ characteristics and of the household’s welfare in the country of origin. Since the pioneering work of Lucas and Stark (1985) on Botswana, many attemps have been made to identify the motivations to remit (for an exhaustive survey of the contributions on the topic, see Rapoport and Docquier, 2005). Altruism is certainly one of the most important explanations: migrants care about close relatives that remain in the country of origin and try to improve their standard of living. A second hypothesis is that remittances mainly represent the repayment of an implicit loan received by emigrants to finance education in their youth, or simply to cover migration costs. Moreover, reciprocity between migrants and non migrants can be involved: while abroad, migrants send money to relatives that take care of their land, cattles, house or even children. Self- interest also could be the main motivation: transfers then become a pure strategy of investment in inheritance and migrants remit to guarantee themselves the possibility to inherit once parents will be dead. However, remittances may not depend only on migrants’ individual decisions but be just one of the elements of a broader intrafamilial insurance arrangement. Income volatility in rural regions