Migration as a Safety Net and Effects of Remittances on Household Consumption: The Case of Colombia
AbstractWe assess whether international remittances affect Colombian household’s expenditure composition and demand of education. We exploit the migratory wave that took place on late 90s due to one of the deepest crises in Colombian history, along with institutional barriers to migration, to identify the effect of remittances on expenditure composition. The empirical exercises find a positive effect over education, beneficiary households expending about 10% of total expenditure more in education than non beneficiaries. In addition although no effect was found on enrollment rates, we found an important effect on the probability of attending a private, rather that a public, educational institution. Such effect is on average 24% for individuals 5-30 years old, 50% for those attending secondary education, and 40% for those attending higher education. On the other hand, effects over consumption, investment and health expenditure, are nil. Finally, we find important effects of remittances on living standards of beneficiary households.
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Bibliographic InfoPaper provided by Banco de la Republica de Colombia in its series Borradores de Economia with number 414.
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International Remittances; International Migration; Safety Net; Consumption Composition Classification JEL: F22; I31; P36.;
Other versions of this item:
- Lina Cardona Sosa & Carlos Medina, 2006. "Migration as a Safety Net and Effects of Remittances on Household Consumption: The Case of Colombia," BORRADORES DE ECONOMIA 003219, BANCO DE LA REPÚBLICA.
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
- P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-18 (All new papers)
- NEP-DEV-2006-11-18 (Development)
- NEP-LAM-2006-11-18 (Central & South America)
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