The Impact of Remittances on Poverty and Human Capital: Evidence from Latin American Household Surveys
Author(s): H. Lopez P. Acosta P. Fajnzylber
This paper explores the impact of remittances on poverty, education, and health in eleven Latin American countries using nationally representative household surveys and making an explicit attempt to account for one of the inherent costs associated with migration: the potential income that the migrant may have made at home. The research demonstrates that in general remittances appear to lower poverty levels in recipient countries. Yet, despite this general tendency the estimated impact of remittances on relieving poverty tends to be modest. Looking at the educational attainment of children aged 12 to 17 in households receiving remittances, the results of the research suggest that remittances are positively and significantly associated with higher educational attainment in 6 out of 11 countries - the exceptions being Mexico, Paraguay, Peru, Jamaica and the Dominican Republic. However, the estimated positive impact of remittances varies by gender and across rural and urban areas, e.g. in Ecuador a significant impact is found only for urban areas. Finally, in terms of child health outcomes, the results are limited to two countries: Nicaragua and Guatemala, although in both cases they suggest that remittances improve children's health, particularly among low-income households.