How Do Remittances Affect Human Capital Formation of School-Age Boys and Girls?

Abstract

We revisit the impact of remittances on educational attainment of school-age children in Nepal, paying particular attention to differences between girls and boys. A heightened interest in understanding the impact of remitting practices on a variety of economic variables has emerged as remittances to developing countries continue to rise. In Nepal, the World Bank reports that remittances amounted to $1.2 billion (US dollars) in 2005, while GDP was $8.2 billion and official development assistance totaled $425 million (World Bank 2007). We use the 1995/1996 Nepal Living Standards Survey (NLSS) to examine the impact of remittances on human capital investments for female and male children. If remittances do affect human capital positively, then not only will remittances affect long-run growth in Nepal, but the opportunities for women in Nepal should improve as the female population becomes more educated.The effect of remittances on human capital investment is unclear a priori. Increasing income through remittances may increase investment in children's schooling by relaxing household budget and capital constraints. Conversely, household absenteeism pressures children to work in the home, reducing time for education. Our data provide an opportunity to separate the effect of household disruption from the income effect of remittances on the decision to invest in schooling. We are able to measure the number of adults living outside the household so that we may control for absenteeism in estimating the impact of remittances on household schooling choices. We ask if the impact varies by gender and age group (young child versus older child). Our results indicate that young children benefit more from remittances, but the benefits, controlling

Can Parental Migration Reduce Petty Corruption in Education?

“…5 For example, past migration rates (Antman 2011;McKenzie and Rapoport 2010;Zhang et al 2014), financial infrastructure (Calero, Bedi, and Sparrow 2009), and political unrest (Bansak and Chezum 2009) at the origin-level; employment conditions (Antman 2011;Cortes 2015) and exchange rate crises (Yang 2008) at the destination-level. 6 Antman (2012) uses the age-differences across siblings at the time of parental migration while con-6 anisms underlying these reduced-form estimates.…”

“…6 Antman (2012) uses the age-differences across siblings at the time of parental migration while con-6 anisms underlying these reduced-form estimates. Notable exceptions are Yang (2008), who isolates the effect of received remittances from Filipino migrants, and Bansak and Chezum (2009), who distinguish between remittances and parental absence effects for Nepal. As predicted, both studies find that remittances have positive effects on the quantity of schooling.…”

Rainfall, Financial Development, and Remittances: Evidence from Sub-Saharan Africa

“…3 However, a second key issue when dealing with identifying the causal relationship between transitory income shocks and remittances that has not received sufficient attention in the literature is whether the transitory change in income is due to a transitory change in productivity, or whether it is due to a transitory but abrupt change in the capital stock that could be the consequence of 1 See http://www.smartmoney.com/news/on/?story=on-20110330-000243. 2 See for example Amuedo-Dorantes and Pozo (2006), Bansak andChezum (2009), or Acosta et al (2009). 3 See for example Yang (2007) and Yang and Choi (2007).…”

The effects of external migration on enrolments, accumulated schooling and dropouts in Punjab

“…Different authors have used different instrumental variables to resolve this problem. Bansak and Chezum (2009) use past literacy rates and political unrest, based on the idea that historically, districts with higher literacy rates have better job prospects due to agglomeration economies, thus individuals in these districts are less likely to migrate. Likewise, districts with political unrest have disrupted social networks which would potentially have a negative impact on migration decisions in an area.…”