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Migrant remittances and human capital investments

Author

Listed:
  • Cephas Naanwaab

    (Department of Economics, North Carolina AT State University, 1601 E. Market Street, Greensboro, NC 27411, USA.)

  • Osei Agyeman Yeboah

    (Department of Agribusiness, Applied Economics and Agriscience Education, North Carolina A&T State University, 1601 E. Market Street, Greensboro, NC 27411, USA.)

Abstract

The objective of thispaper is to investigate the effect of migrant remittances on human capital investments in remittance receiving countries. Prior studies have generally focused on the effects of remittances on consumption and poverty reduction, without much effort given to human capital investments. We seek to fill this void by using a panel dataset comprising 71 developing countries drawn from the World Bank's six regions to analyze the impact of remittance receipts on investment in human capital. The methodology we employ in the analysis is based on a systems approach using three stage least squares regressions to account for endogeneity and/or simultaneity bias of remittances. Contrary to previous findings that remittances only support consumption and yield no social returns, we find that remittances do have a positive and significant effect on two measures of human capital investments, educational spending and healthcare spending.

Suggested Citation

  • Cephas Naanwaab & Osei Agyeman Yeboah, 2013. "Migrant remittances and human capital investments," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 6(2), pages 191-202, December.
    • Handle: RePEc:rse:wpaper:v:6:y:2013:i:2:p:191-202
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    References listed on IDEAS

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    1. Athenia Bongani Sibindi & Lindiwe Ngcobo, 2018. "Migrant Remittance Patterns in South Africa: A Micro-Level Analysis," Journal of Economics and Behavioral Studies, AMH International, vol. 10(4), pages 109-117.

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    More about this item

    Keywords

    migrant remittances; health spending; educational investment;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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