Mixed effects of remittances on child education

Abstract

We exploit the size of the 2010 Ecuadorian Census to estimate the effect of remittances on secondary school enrollment across four key dimensions: gender, household wealth, rural vs. urban, and family migration status. Using a bivariate probit model that accounts for both endogeneity and non-linearity issues, we find both positive and negative effects of remittances on the likelihood of schooling. The strongest positive effects are for poorer, urban males, while the negative effects are for rural females. For children in wealthier households, the effects of remittances are either negative or non-significant. This suggests that the positive income effects of remittances may be offset by the negative effects of a missing parent due to migration, more visible in wealthier families where financial constraints may not be as binding. We find further support for this by estimating the effects of remittances conditional on migration status. Our results show positive effects on schooling for non-migrant households that receive remittances and no effects for children living in households where at least one parent has migrated. The sharp contrasts within and across groups, while using the same data and econometric specifications, help explain the lack of consensus in the literature.

Migration, remittances and human capital investment in Kenya

“…Mansour, Chaaban, and Litchfield (), using a censored ordered probit model, find a positive effect of remittances on both educational attainment and school attendance in Jordan. A recent paper by Bucheli, Bohara, and Fontenla () finds mixed effects of remittances on education outcomes in Ecuador using 2010 Census data: They find a positive relationship between remittances and secondary school enrollment for poor, urban males and negative effects for rural females. Thus, the link between remittances and education outcomes can vary, depending on the characteristics of the migrant and the household.…”

“…Mansour, Chaaban, and Litchfield (2011), using a censored ordered probit model, find a positive effect of remittances on both educational attainment and school attendance in Jordan. A recent paper by Bucheli, Bohara, and Fontenla (2018) finds mixed effects of remittances on education outcomes in Ecuador using 2010 Census data:…”

Seasonal Migration and Education of Children Left Behind: Evidence from Armenia

“…Another instrument used in the literature of seasonal migration is the age of the head of the household (Bucheli, Bohara, & Fontenla, 2018). The main idea behind this approach is that the age of the head of the household is potentially exogenous to socioeconomic conditions in the origin country and does not affect schooling decisions, but affects the probability of migrating and sending remittances.…”

“…The main idea behind this approach is that the age of the head of the household is potentially exogenous to socioeconomic conditions in the origin country and does not affect schooling decisions, but affects the probability of migrating and sending remittances. Bucheli, Bohara, and Fontenla (2018) use an indicator of whether an individual is between 20-50 years old and indicators of economic conditions in primary destinations as instruments for sending remittances. They find that the effect of remittances is positive for boys and negative or insignificant for girls in Ecuador.…”

“…First, seasonal migration decisions of parents are potentially endogenous with respect to the performance of their children. To overcome this issue, most existing studies use instrument variables (IVs), such as historical migration networks (McKenzie & Rapoport, 2011;Davis & Brazil, 2016), the age of the head of the household (Bucheli, Bohara, & Fontenla, 2018), a sibling's age at the time of parental migration (Antman, 2012), and demand shocks in destination countries (Antman, 2011;Cortes, 2015;Theoharides, 2018). The advantages and disadvantages of these instruments are extensively discussed in the literature, for instance, see Antman (2012) for an excellent review.…”