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The Effects of Remittances on Household Consumption, Education Attendance and Living Standards: the Case of Colombia

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  • Carlos Medina
  • Lina Cardona

Abstract

We assess whether international remittances affect Colombian household’s expenditure composition and demand of education. We exploit the migratory wave and institutional barriers to migration that occurred during the late 1990s, identifying the effect of remittances on expenditure composition. The findings suggest a positive effect on education, with beneficiary households spending about 10 percent more of total expenditure on education than non-beneficiary households. In contrast, no effect was found on enrolment rates. However, the analysis indicates an important effect on the probability of attending a private, rather than a public educational institution. Additionally, this study finds no effects on consumption, investment and health expenditure, although remittances do have salient effects on living standards.

Suggested Citation

  • Carlos Medina & Lina Cardona, 2010. "The Effects of Remittances on Household Consumption, Education Attendance and Living Standards: the Case of Colombia," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 72, pages 11-44.
    • Handle: RePEc:lde:journl:y:2010:i:72:p:11-44
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    2. Omneia HELMY & Chahir ZAKI & Aliaa ABDALLAH, 2020. "Do Workers’ Remittances Promote Consumption Stability In Egypt?," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 20(2), pages 127-144.
    3. Nicolas Yol, 2017. "The ambiguous effects of remittances on health expenditure: a panel data analysis," Economics Bulletin, AccessEcon, vol. 37(4), pages 2561-2573.
    4. Delpierre, Matthieu & Dupuy, Arnaud & Tenikue, Michel & Verheyden, Bertrand, 2017. "The Education Motive for Migrant Remittances: Theory and Evidence from India," IZA Discussion Papers 10772, Institute of Labor Economics (IZA).
    5. Hayot Berk Saydaliev & Lee Chin, 2023. "The necessity of social infrastructure for enhancing educational attainment: evidence from high remittance recipient LMICs," Economic Change and Restructuring, Springer, vol. 56(3), pages 1823-1847, June.
    6. Luis Arango & Dolores Mata & Nataly Obando, 2015. "Echoes of the crises in Spain and US in the Colombian labor market: a differences-in-differences approach," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 6(4), pages 441-477, November.
    7. Carlos Alberto Medina & Christian Manuel Posso, 2011. "Colombian Immigrants In The United States Of America: Education Levels, Job Qualifications And The Decision To Go Back Home," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 29(65), pages 12-59, June.
    8. Chengjuan Xia & Md. Qamruzzaman & Anass Hamadelneel Adow, 2022. "An Asymmetric Nexus: Remittance-Led Human Capital Development in the Top 10 Remittance-Receiving Countries: Are FDI and Gross Capital Formation Critical for a Road to Sustainability?," Sustainability, MDPI, vol. 14(6), pages 1-24, March.
    9. Sultana Begum Abida Mazumder, 2021. "Determinants of Remittances: A Study in Cachar District of Assam," Global Business Review, International Management Institute, vol. 22(2), pages 474-484, April.
    10. Kabajulizi, Judith & Boysen, Ole, 2021. "The macroeconomic implications of COVID-19 pandemic and associated policies: An economy-wide analysis of Uganda," Conference papers 333310, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Akpa, Emeka, 2018. "Private Remittances Received and Household Consumption in Ghana (1980-2016): An ARDL Analysis with Structural Breaks," MPRA Paper 87103, University Library of Munich, Germany.
    12. Su, Chi-Wei & Sun, Tiezhu & Ahmad, Shabbir & Mirza, Nawazish, 2021. "Does institutional quality and remittances inflow crowd-in private investment to avoid Dutch Disease? A case for emerging seven (E7) economies," Resources Policy, Elsevier, vol. 72(C).
    13. Éric Rougier & Nicolas Yol, 2019. "The volatility effect of diaspora's location," The World Economy, Wiley Blackwell, vol. 42(6), pages 1796-1827, June.
    14. Sunday Osahon Igbinedion & Clement Atewe Ighodaro, 2019. "Migrants’ Remittances And Public Expenditure On Education Nexus: Evidence From An Oil-Dependent Economy," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 4(2), pages 112-127, September.
    15. Judith Kabajulizi, 2023. "The macroeconomic implications of disease pandemics in developing countries: An application of Covid‐19 in Uganda," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1254-1286, August.
    16. Md. Qamruzzaman (a) and Wei Jianguo (b), 2020. "Nexus between Remittance and Household Consumption: Fresh Evidence from Symmetric or Asymmetric Investigation," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 45(3), pages 1-27, September.

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    More about this item

    Keywords

    International Remittances; International Migration; Safety Net; Consumption Composition;
    All these keywords.

    JEL classification:

    • 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 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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