School Attendance, Child Labour, and Remittances from International Migration in El Salvador

Abstract

International migrant remittances can increase household budget and reduce liquidity constraint problems, generating consumption and investment opportunities for recipient households. In particular, remittances can enable investing in children's human capital and reduce child labour, key outcomes from the perspective of growth in a developing country. Using data for El Salvador, this article shows: a) a null or insignificant overall impact of remittances on schooling; b) a strong reduction of child wage labour in remittance-recipient households; and c) an increase in unpaid family work activities for children in those households. Moreover, the evidence shows important differences by gender and age of the child in consideration. While girls seem to indeed increase school attendance upon remittance receipts by reducing labour activities, boys do not benefit on average from higher schooling but some time substitution takes place favouring family work activities over paid jobs. And among secondary school-aged children, the impact of remittance may even be negative for educational prospects. These results suggest the presence of differences in the allocation of resources within the household.

Remittance Effects on Child Labour: Evidence from Burkina Faso

“…Note that the advantage of child-level estimations is that they can be more readily compared to results in other studies, which usually report estimations of binary child labour market participation. This is the case, for instance, in Calero et al (2009) and Acosta (2011), who report estimates of a similar order as ours. The former study finds that on average remittances decrease work participation of children in Ecuador by 2 percentage points, which corresponds to a 5 per cent decrease in the child labour rate in general (6.5% decrease among receiving households).…”

“…Many other empirical papers have emphasised the positive role of remittances on school attendance (for instance, Acosta, [2011]; Calero, Bedi, & Sparrow [2009];Cox Edwards & Ureta [2003]; Yang [2008]), but few have focused on child labour. Among exceptions we are aware of, Alcaraz, Chiquiar, and Salcedo (2012) study the effect of remittances from the US on child labour in Mexico; Acosta (2011) explores the role of remittances from international migrants on labour supply of family members in El Salvador; and Calero et al (2009) show that remittances via transnational networks reduce the incidence of child work in Ecuador.…”

Labour effects of foreign and domestic remittances – evidence from Pakistan

“…The departure of the migrant raises the marginal productivity of household work of the remaining household members (Cahuc and Zylberberg 2004). Receipt of transfers reduces the shadow value of the market wage of the staying behind household members, and allows them to allocate more time to household activities (Acosta 2011). This leads to a higher intra-household specialization where the migrant takes up the responsibility of providing for the household's financial needs and the left-behind members (especially women) specializing in homemaking (Hanson 2007a).…”

The Effects of International Remittances on Poverty and Inequality in Ethiopia

“…2 There are also some evidences that remittances serve as insurance against crop failure (Yang and Choi, 2007) and are invested on physical and human capital (Adams, 2006;Adams and Cuecuecha, 2010;Edwards and Ureta, 2003). But remittances may also create a moral hazard problem of increasing unemployment or lowering work efforts (Grigorian and Melkonyan, 2008;Acosta, 2011) thereby reducing the positive effects.…”