Lauren Malone
PhD Candidate in International Economics
CONTACT:
Economics Department
UC
Migrant’s Remittances and Investments in
Children’s Human Capital: The Role of Asymmetric Preferences in
Abstract:
This paper evaluates the ability of
migrants’ remittances to spur development via investments in
children’s human capital. Findings reveal that this depends largely
on the gender of the de facto household head, as remittances sent from migrant
fathers to mothers are those most likely to be invested in
education. Assuming asymmetric parental preferences, I present a
two-stage model of migrants’ remittances. Both parents are
altruistic; mothers have a greater preference for human capital, while fathers
prefer to invest in physical capital. Remittances sent by migrant fathers
are spent differently from other income sources and have the potential to
benefit children via two effects. The first is the change in allocative power of the mother and the second is her
revealed preference for investments in children's education. The model is
then tested using data provided by the Mexican Migration Project.
Empirical results confirm that remittances have the potential to effect
household level development and that remittance allocation decisions differ for
mothers and fathers. Mothers are in fact more likely to report that
migrant income was spent on education. Finally, I analyze the effect of
parental absences on children's education and find that fathers’ absences
due to migration during all age ranges positively affect children’s
educational attainment, while mothers’ absences have no effect.