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

  • Carlos Medina
  • Lina Cardona

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.

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Article provided by Universidad de Antioquia, Departamento de Economía in its journal LECTURAS DE ECONOMÍA.

Volume (Year): (2010)
Issue (Month): 72 ()
Pages: 11-44

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Handle: RePEc:lde:journl:y:2010:i:72:p:11-44
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  1. George J. Borjas & Stephen G. Bronars, 1990. "Immigration and the Family," NBER Working Papers 3509, National Bureau of Economic Research, Inc.
  2. 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.
  3. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  4. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-18, October.
  5. Adolfo Meisel & Margarita Vega, . "The Stature of the Colombian Elite Before the Onset of Industrialization, 1870-1919," Borradores de Economia 339, Banco de la Republica de Colombia.
  6. Ximena Cadena Ordóñez & Mauricio Cárdenas Santa María, 2004. "Las remesas en Colombia: costos de transacción y lavado de dinero," WORKING PAPERS SERIES. DOCUMENTOS DE TRABAJO 003127, FEDESARROLLO.
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