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Labor supply, school attendance, and remittances from international migration : the case of El Salvador

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Author Info
Acosta, Pablo

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Abstract

The objective of this paper is to present microeconomic evidence on the economic effects of international remittances on households'spending decisions. Remittances can increase the household budget and reduce liquidity constraint problems, allowing more consumption and investment. In particular, remittances can afford investing in children's human capital, a key outcome for the discussion of the perspective of growth in a high recipient developing country. Robust estimates that take into account both selection and endogeneity problems in estimating an average impact of remittances are substantially different from least squares (OLS) estimates presented in previous studies, indicating the importance of dealing with these methodological concerns. After controlling for household wealth and using selection correction techniques such as propensity score matching as well as village and household networks as instruments for remittances receipts, average estimates suggest that girls and young boys (less than 14 years old) from recipient households seem to be more likely to be enrolled at school than those from nonrecipient households. Remittances are also negatively related to child labor and adult female labor supply, while adult male labor force participation remains unaffected on average. The results signaling that the additional income derived from migration increases girls'education and reduces women's labor supply, with no major impact on activity choice for males 14 years or older, suggest the presence of gender differences in the use of remittances across (and possibly, within) households.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3903.

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Date of creation: 01 Apr 2006
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Handle: RePEc:wbk:wbrwps:3903

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Related research
Keywords: Remittances; Gender and Development; Economic Theory&Research; Housing&Human Habitats; Anthropology;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
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    Other versions:
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    Other versions:
Full references

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. David A. Grigorian & Tigran A. Melkonyan & J. Scott Shonkwiler, 2008. "Garbage In, Gospel Out? Controlling for the Underreporting of Remittances," IMF Working Papers 08/230, International Monetary Fund. [Downloadable!]
  2. C. Calero & Arjun S. Bedi & R. Sparrow, 2008. "Remittances, liquidity constraints and human capital investments in Ecuador," Working Papers - General Series 458, Institute of Social Studies. [Downloadable!]
    Other versions:
  3. Maurice Schiff, 2008. "On the underestimation of migration’s income and poverty impact," Review of Economics of the Household, Springer, vol. 6(3), pages 267-284, September. [Downloadable!] (restricted)
  4. Dennis Görlich & Toman Omar Mahmoud & Christoph Trebesch, 2007. "Explaining Labour Market Inactivity in Migrant-Sending Families: Housework, Hammock, or Higher Education," Kiel Working Papers 1391, Kiel Institute for the World Economy. [Downloadable!]
  5. Pia R. Pinger, 2007. "Come Back or Stay? Spend Here or There? Temporary versus Permanent Migration and Remittance Patterns in the Republic of Moldova," Kiel Advanced Studies Working Papers 438, Kiel Institute for the World Economy. [Downloadable!]
  6. Maurice Schiff, 2006. "Migration's Income and Poverty Impact Has Been Underestimated," IZA Discussion Papers 2088, Institute for the Study of Labor (IZA). [Downloadable!]
  7. David A. Grigorian & Tigran A. Melkonyan, 2008. "Microeconomic Implications of Remittances in an Overlapping Generations Model with Altruism and Self-Interest," IMF Working Papers 08/19, International Monetary Fund. [Downloadable!]
  8. Lokshin, Michael & Glinskaya, Elena, 2008. "The effect of male migration for work on employment patterns of females in nepal," Policy Research Working Paper Series 4757, The World Bank. [Downloadable!]
  9. Bertoli Simone, 2006. "Remittances and the dynamics of human capital in the recipient country," Department of Economics Working Papers 200607, University of Turin. [Downloadable!]
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