Bosnia-Herzegovina, as a country that relies on significant amount of
remittances inflows, has experienced drop in these inflows as a consequence of the
global economic crisis. This paper aims to analyse whether and how this decrease
was related to the change in motives in sending remittances. The change in motives
will be analysed by exploring the interaction between social transfers and
remittances, using two dataset from the two Household Budget Surveys, conducted
in 2007 (before the crisis) and 2011 (during the crisis). The analysis is based on the
estimation of two model specifications, one that does and another that does not
control for non-monotonicity of the motives. Compared to previous studies, this
paper estimates the non-monotonic ‘crowding out’ effect by an innovative empirical
model specification. The findings suggest that the predominant motive for sending
remittances to Bosnia-Herzegovina before the crisis was exchange, while during the
crisis the senders of remittances are more altruistic. In addition, the results from the
model on non-monotonicity of motives support the hypothesis that transfer motives
are changing differently for poor and non-poor recipients of remittances as a
consequence of the economic crisis