Labor Supply, School Attendance, and Remittances from International Migration : The Case of El Salvador

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.

Bibliographic Details

Main Author:	Acosta, Pablo
Language:	English
Published:	Washington, DC 2006-04
Subjects:	ADULT MEN, ASSETS, BALANCE OF PAYMENT, BALANCE OF PAYMENT STATISTICS, BALANCE OF PAYMENTS, BALANCE OF PAYMENTS STATISTICS, CAPITA INCOME, CAPITAL MARKETS, CASH TRANSFERS, CHILD HEALTH, CHILD LABOR, DEPENDENCE, DIRECT IMPACT OF REMITTANCES, DISCRIMINATION, DURABLE GOODS, ECONOMIC GROWTH, ECONOMIC SITUATION, ECONOMIES OF SCALE, EFFECT OF REMITTANCES, EMIGRATION, EVOLUTION OF REMITTANCES, EXCHANGE RATE, FAMILY INCOME, FAMILY WEALTH, FEMALE HEADS, FEMALE LABOR, FUNCTIONAL FORMS, FUTURE RESEARCH, GDP, GENDER, GENDER DIFFERENCES, GIRLS, HOME COUNTRY, HOME OWNERSHIP, HOUSEHOLD BUDGET, HOUSEHOLD INCOME, HOUSING, HUMAN CAPITAL, IMPACT OF REMITTANCES, IMPORTANCE OF REMITTANCES, INCOME, INEQUALITY, INTERNAL MIGRATION, INTERNATIONAL MIGRANT, INTERNATIONAL MIGRANTS, INTERNATIONAL MIGRATION, INTERNATIONAL REMITTANCES, LABOR FORCE, LABOR FORCE PARTICIPATION, LATIN AMERICAN, LIQUIDITY, LIQUIDITY CONSTRAINTS, LIVING STANDARDS, MACROECONOMIC BALANCE, MIGRANT, MIGRANT COMMUNITIES, MIGRANT FAMILIES, MIGRANT FAMILY MEMBERS, MIGRANT REMITTANCE, MIGRANTS, MIGRATION DECISION, MIGRATION PATTERNS, MIGRATION PROCESS, MOBILITY, MONEY TRANSFER, MONEY TRANSFERS, PEACE, PER CAPITA INCOME, POWER OF WOMEN, PURCHASING POWER, RECIPIENT HOUSEHOLDS, RECIPIENT OF REMITTANCES, RECIPIENTS OF REMITTANCES, REGRESSION ANALYSIS, REMITTANCE, REMITTANCE FLOWS, REMITTANCE RECEIPTS, REMITTANCE RECIPIENTS, REMITTANCE SENDERS, REMITTANCES, REMITTANCES FLOWS, ROLE OF REMITTANCES, RURAL AREAS, SOCIAL NETWORKS, TRANSFER COSTS, USE OF REMITTANCES, USES OF REMITTANCES, UTILITY MAXIMIZATION, VILLAGES,
Online Access:	http://documents.worldbank.org/curated/en/2006/04/6795776/labor-supply-school-attendance-remittances-international-migration-case-el-salvador https://hdl.handle.net/10986/8179
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