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How do Migration and Remittances Affect Human Capital Investment? The Effects of Relaxing Information and Liquidity Constraints

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  • Chakra P. Acharya
  • Roberto Leon-Gonzalez

Abstract

This article explores the heterogeneous effects of the migration-remittance process on the educational attainment of Nepalese children. The results suggest that when controlling for remittances, the children of more educated or informed parents suffer from parental absence, while the children of less informed parents gain from migration, implying that the migration experience helps less educated parents estimate the value of and returns to education more precisely. The results also suggest that remittances help severely credit-constrained households enrol their children in school and prevent dropouts. These remittances help households that face less severe liquidity constraints increase their investment in quality education.

Suggested Citation

  • Chakra P. Acharya & Roberto Leon-Gonzalez, 2014. "How do Migration and Remittances Affect Human Capital Investment? The Effects of Relaxing Information and Liquidity Constraints," Journal of Development Studies, Taylor & Francis Journals, vol. 50(3), pages 444-460, March.
    • Handle: RePEc:taf:jdevst:v:50:y:2014:i:3:p:444-460
    DOI: 10.1080/00220388.2013.866224
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    1. Acosta, Pablo & Fajnzylber, Pablo & Lopez, J. Humberto, 2007. "The impact of remittances on poverty and human capital : evidence from Latin American household surveys," Policy Research Working Paper Series 4247, The World Bank.
    2. Adams, Richard H., Jr., 1991. "The effects of international remittances on poverty, inequality, and development in rural Egypt:," Research reports 86, International Food Policy Research Institute (IFPRI).
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