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We investigate the impact of international labour migrants’ remittances on household expenditures in Uzbekistan as an understudied case of South‐South migration. In doing so, we use instrumental variable regressions to address endogeneity caused by self‐selection bias. We find that remittance‐receiving households spend a significantly smaller part of their budgets on food and health. This finding contrasts with studies of South‐South remittances in Africa that find that households tend to spend most of their remittance incomes on food. Our estimations also provide evidence that remittance‐receiving households spend a larger part of their total expenditures on non‐food consumption. Remittances’ impact on healthcare expenditures is negative and on education expenditures is insignificant. These results support the view that remittances in this South‐South migration corridor are channelled mainly to consumer goods, limiting their contribution to economic development.

We examine to what extent a specific aspect of national culture-uncertainty avoidance-can explain crosscountry variations in (dis)trust in banks. Relying on data from the World Values Survey, we find that trust in banks is lower in countries that score high for Hofstede's uncertainty avoidance index. Similarly, with Global Findex data, we find that financial exclusion due to a lack of trust in banks is high in high uncertainty avoidance cultures. These results highlight the need for a more culturally aware approach when designing consumer protection measures for the banking sector.

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