Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246714 
Year of Publication: 
2021
Series/Report no.: 
ADB Economics Working Paper Series No. 637
Publisher: 
Asian Development Bank (ADB), Manila
Abstract: 
Remittances from overseas can encourage human capital investment and improve educational outcomes in developing countries. Empirical studies, however, have shown mixed evidence at best. This paper uses a 5-year panel dataset that tracks the same 3,000 households and 8,000 individuals through time in all seven regions of the Kyrgyz Republic to examine the impact of remittances on the human capital formation of school-age children. After correcting for selection bias and other potential endogeneities with instrumental variables and fixed effects regressions, remittances are found to have negative impacts on human capital investment and educational achievement. The negative effects can be attributed in part to recipients' increased expenditure on durable goods and extended hours of child labor on farm work as a compensation for missing adult labor. Our finding calls for actions that mitigate the negative effects and incentivize families to spend remittances on education, including financial literacy education, better monitoring of farm labor hours of school-age children, and targeted investment to improve the quality of education services in the Kyrgyz Republic.
Subjects: 
education
household expenditure
human capital investment
Kyrgyz Republic
labor migration
remittances
JEL: 
D13
F22
F24
O15
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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