Remittances, Liquidity Constraints and Human Capital Investments in Ecuador

Carla Calero*, Arjun S. Bedi, Robert Sparrow

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

189 Citations (Scopus)

Abstract

Over the last decade Ecuador has experienced a strong increase in financial transfers from migrated workers. This paper investigates how remittances via trans-national networks affect human capital investments through relaxing resource constraints and facilitate households in consumption smoothing by reducing vulnerability to economic shocks. Our results show that remittances increase school enrollment and decrease incidence of child work, especially for girls and in rural areas. Furthermore, we find that aggregate shocks are associated with increased work activities, while remittances are used to finance education when households are faced with these shocks.

Original languageEnglish
Pages (from-to)1143-1154
Number of pages12
JournalWorld Development
Volume37
Issue number6
DOIs
Publication statusPublished - Jun 2009
Externally publishedYes

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