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Remittance and Migrant Households' Consumption- and Saving Patterns: Evidence from Indonesia

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Abstract

We examine the effect of remittances on the migrant households consumption and saving patterns as well as their living standard using the Indonesia Family Life Survey data. Using matching - and difference-in-differences matching estimators, we find that remittances seem to change the household consumption patterns. However, we do not find strong evidence that indicates remittances improve these households' living standard. Moreover, it seems that remittance households do not enjoy better education or healthcare, which suggests that remittances may not play an important role in speeding up economic development through these two means. If anything, we show that remittance households manage to invest some of their income in the traditional forms of investment such as in house and jewelry (i.e., gold).

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Paper provided by Nottingham University Business School Malaysia Campus in its series NUBS Malaysia Campus Research Paper Series with number 2008-02.

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Date of creation: Jun 2008
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Handle: RePEc:nom:nubsmc:2008-02

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Keywords: Remittances; Matching estimator;

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