Migration as a safety net and effects of remittances on household consumption: the case of Colombia

Abstract

We assess whether international remittances affect Colombian household's expenditure composition and demand of education. We exploit the migratory wave that took place on late 90s due to one of the deepest crises in Colombian history, along with institutional barriers to migration, to identify the effect of remittances on expenditure composition. The empirical exercises find a positive effect over education, beneficiary households expending about 10% of total expenditure more in education than non beneficiaries. In addition although no effect was found on enrollment rates, we found an important effect on the probability of attending a private, rather that a public, educational institution. Such effect is on average 24% for individuals 5-30 years old, 50% for those attending secondary education, and 40% for those attending higher education. On the other hand, effects over consumption, investment and health expenditure, are nil. Finally, we find important effects of remittances on living standards of beneficiary households.

Is an Ounce of Remittance Worth a Pound of Health? The Case of Tajikistan

“…Health expenditure can then be interpreted as a household’s commitment to obtaining better health outcomes. In accordance with the findings of Amuedo-Dorantes et al (2007), Cardona Sosa and Medina (2006), and Valero-Gil (2009), we anticipate that remittances will have a positive effect on health expenditure for Tajik households. We argue that expenditure alone, however, is an incomplete indicator of health outcomes and, thus, supplement our analysis with additional proxy measures for health outcome.…”

“…The literature on the relationship between remittances and health is largely centered around two outcomes of interest: health expenditure and health outcomes . Many studies note a positive relationship between remittances and health expenditure (Cardona Sosa and Medina 2006; Mora and Taylor 2006; Amuedo-Dorantes et al 2007; Valero-Gil 2009; Adams and Cuecuecha 2010; Kalaj 2013). In Tajikistan, Clément (2011) found that in 2003, receiving remittances (both domestic and international) led to a slight increase in health expenditure but only for the second income quintile.…”

Parental Migration in Colombia: Children's Voices in National and International Perspectives

“…Some Colombian families also use remittances for other items such as moving children from public to private schools (Ardila Calderón et al. ; Cardona Sosa and Medina ; Paredes and Tovar Cuevas ), for accessing extracurricular sports and arts activities (López Montaño and Loaiza Orozco ), for using private health services and health procedures not covered by insurance (e.g., cosmetic surgery and orthodontics), and for buying what some judge to be unnecessary luxuries (e.g., fancy clothes, videogames). Criticisms, stereotypes, and stigmatization of migrant parents and children emerge when remittances are spent on items that relate to gaining higher status and when consumption patterns change.…”

Choques externos y remesas internacionales en las regiones de Colombia

“…Los receptores, por su parte, son un su mayoría mujeres y tienen vínculos familiares con el remitente. En línea con la literatura internacional, Cardona y Medina (2006) y Cárdenas et al (2010) encuentran que los hogares receptores de remesas reportan mayores niveles de calidad de vida y gastan más en educación, aún cuando 1 Este documento se concentra en las migraciones y las remesas internacionales. Por simplicidad, en adelante éstas serán referidas simplemente como migraciones y remesas.…”