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Remittances, liquidity constraints and human capital investments in Ecuador

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Author Info
C. Calero
Arjun S. Bedi
R. Sparrow

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Abstract

Over the last decade Ecuador has experienced a strong increase in financial transfers from migrated workers. This paper investigates how remittances via trans-national networks affect human capital investments through relaxing resource constraints and facilitate households in consumption smoothing by reducing vulnerability to economic shocks. Our results show that remittances increase school enrolment and decrease incidence of child work, especially for girls and in rural areas. Furthermore, we find that aggregate shocks are associated with increased work activities, while remittances are used to finance education when households are faced with these shocks.

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Paper provided by Institute of Social Studies in its series Working Papers - General Series with number 458.

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Length: 25 p.
Date of creation: 2008
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Handle: RePEc:iss:wpaper:458

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Related research
Keywords: migration; remittances; transnational networks; human capital; Latin America; Ecuador.;

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Find related papers by JEL classification:
I20 - Health, Education, and Welfare - - Education - - - General
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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  1. McKenzie, David & Sasin, Marcin J., 2007. "Migration, remittances, poverty, and human capital : conceptual and empirical challenges," Policy Research Working Paper Series 4272, The World Bank. [Downloadable!]
  2. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier. [Downloadable!] (restricted)
    Other versions:
  3. Morduch, Jonathan, 1995. "Income Smoothing and Consumption Smoothing," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 103-14, Summer. [Downloadable!] (restricted)
    Other versions:
  4. Dehejia, Rajeev H. & Beegle, Kathleen & Gatti, Roberta, 2003. "Child labor, income shocks, and access to credit," Policy Research Working Paper Series 3075, The World Bank. [Downloadable!]
  5. Timothy Halliday, 2005. "Migration, Risk and Liquidity Constraints in El Salvador," Working Papers 200511, University of Hawaii at Manoa, Department of Economics, revised 28 Mar 2006. [Downloadable!]
    Other versions:
  6. Alexandra Cox Edwards & Manuelita Ureta, 2003. "International Migration, Remittances, and Schooling: Evidence from El Salvador," NBER Working Papers 9766, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Funkhouser, Edward, 1992. "Migration from Nicaragua: some recent evidence," World Development, Elsevier, vol. 20(8), pages 1209-1218, August. [Downloadable!] (restricted)
  8. Douglas Miller & Anna Paulson, 2000. "Informal Insurance and Moral Hazard: Gambling and Remittances in Thailand," Econometric Society World Congress 2000 Contributed Papers 1463, Econometric Society. [Downloadable!]
  9. HwaJung Choi, 2007. "Are Remittances Insurance? Evidence from Rainfall Shocks in the Philippines," World Bank Economic Review, Oxford University Press, vol. 21(2), pages 219-248, May. [Downloadable!] (restricted)
  10. Skoufias, Emmanuel, 2003. "Economic Crises and Natural Disasters: Coping Strategies and Policy Implications," World Development, Elsevier, vol. 31(7), pages 1087-1102, July. [Downloadable!] (restricted)
  11. Dean Yang & HwaJung Choi, 2005. "Are Remittances Insurance? Evidence from Rainfall Shocks in the Philippines," Working Papers 535, Research Seminar in International Economics, University of Michigan. [Downloadable!]
  12. Vos, R. & Ponce, J., 2004. "Meeting the millennium development goal in education : a cost-effectiveness analysis for Ecuador," Working Papers - General Series 402, Institute of Social Studies. [Downloadable!]
  13. Catalina Amuedo-Dorantes & Susan Pozo, 2006. "Migration, Remittances, and Male and Female Employment Patterns," American Economic Review, American Economic Association, vol. 96(2), pages 222-226, May. [Downloadable!]
  14. Morduch, Jonathan, 1999. "Between the State and the Market: Can Informal Insurance Patch the Safety Net?," World Bank Research Observer, Oxford University Press, vol. 14(2), pages 187-207, August. [Downloadable!]
  15. Glewwe, Paul & Hall, Gillette, 1998. "Are some groups more vulnerable to macroeconomic shocks than others? Hypothesis tests based on panel data from Peru," Journal of Development Economics, Elsevier, vol. 56(1), pages 181-206, June. [Downloadable!] (restricted)
  16. Acosta, Pablo, 2006. "Labor supply, school attendance, and remittances from international migration : the case of El Salvador," Policy Research Working Paper Series 3903, The World Bank. [Downloadable!]
  17. McKenzie, David & Rapoport, Hillel, 2006. "Can migration reduce educational attainment ? Evidence from Mexico," Policy Research Working Paper Series 3952, The World Bank. [Downloadable!]
  18. Jacoby, Hanan G & Skoufias, Emmanuel, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Blackwell Publishing, vol. 64(3), pages 311-35, July. [Downloadable!] (restricted)
  19. Mansuri, Ghazala, 2006. "Migration, school attainment, and child labor : evidence from rural Pakistan," Policy Research Working Paper Series 3945, The World Bank. [Downloadable!]
  20. Edwards, Alejandra Cox & Ureta, Manuelita, 2003. "International migration, remittances, and schooling: evidence from El Salvador," Journal of Development Economics, Elsevier, vol. 72(2), pages 429-461, December. [Downloadable!] (restricted)
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