Evaluating the Impact of Remittances on Human Capital Investment in the Kyrgyz Republic

Xin Gao (), Aiko Kikkawa () and Jong Woo Kang
Additional contact information
Xin Gao: Cornell University
Aiko Kikkawa: Asian Development Bank

No 637, ADB Economics Working Paper Series from Asian Development Bank

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.

Keywords: education; household expenditure; human capital investment; Kyrgyz Republic; labor migration; remittances (search for similar items in EconPapers)
JEL-codes: D13 F22 F24 O15 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2021-05-25
New Economics Papers: this item is included in nep-dev and nep-edu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.adb.org/publications/impact-remittance ... ital-kyrgyz-republic Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0637

Access Statistics for this paper

More papers in ADB Economics Working Paper Series from Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. Contact information at EDIRC.
Bibliographic data for series maintained by Orlee Velarde ().