Remittances, household expenditure and investment in Guatemala

By R. H. Adams. 2005

801 citations recorded by the source corpus.

The author uses a large household data set from Guatemala to analyze how the receipt of internal remittances (from Guatemala) and international remittances (from the United States) affects the marginal spending behavior of households on various consumption and investment goods. Contrary to other studies, the author finds that households receiving remittances actually spend less at the margin on consumption-food and consumer goods and durables-than do households receiving no remittances. Instead of spending on consumption, households receiving remittances tend to spend more on investment goods, like education, health, and housing. The analysis shows that a large amount of remittance money goes into education. At the margin, households receiving internal and international remittances spend 45 and 58 percent more, respectively, on education, than do households with no remittances. These increased expenditures on education represent investment in human capital. Like other studies, the author finds that remittance-receiving households spend more at the margin on housing. These increased expenditures on housing represent a type of investment for the migrant, as well as a means for boosting local economic development by creating new income and employment opportunities for skilled and unskilled workers.

Subfields: Economics and Econometrics, Safety Research, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/bf13401a76138f395096ac901c6b32cd2a774610

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Citations in the corpus

Do remittances improve income inequality? An instrumental variable quantile analysis of the Kenyan case (2016, background): “…Aggarwal et al. 2011; Chowdhury, 2011)2; enhancing human capital formation by increasing educational expenditure at the household level (Yang, 2008; Adams and Cuecuecha, 2010); and increasing the level of investment (Lartey, 2013), both by 2 See Coulibaly (2015) for conflicting evidence in the…”
Does Migration Reshape Expenditures in Rural Households? Evidence from Mexico (2006, background): “Remittances may interact with other variables, including total expenditures and household socio-demographic characteristics, as illustrated clearly in Adams (2005).”
Migration Remittances and Development: A Review of Global Evidence (2006, background): “Table 14 gives the predicted signs for the effects 20 Adams (2005).”
Remittances flow and financial development in Bangladesh (2011, background): “Adams (2005) and Taylor et al. (2005) suggest that remittances reduce both the level and severity of poverty in Guatemala and Mexico respectively.”
Remittances, Financial Market Development, and Economic Growth: The Case of Latin America and the Caribbean (2009, neutral): “…used household data or microdata to study the effects of remittances on education and health, on poverty (Cox and Ureta, 2003; Lopez Cordova, 2004; Adams, 2005), and on income inequality in the country of origin (Stark et al., 1986a, 1986b; Milanovic, 1987; Adams, 1989; Taylor, 1992; Taylor and…”
DO MIGRANT REMITTANCES AFFECT THE CONSUMPTION PATTERNS OF ALBANIAN HOUSEHOLDS (2007, methodology): “The estimation of the interaction model will also enable us, albeit to a limited extent, to compare our results to those found by other authors in this area of research (e.g., Adams, 2005, and Taylor and Mora, 2006).”
Does Non-farm Income Affect Food Security? Evidence from India (2019, background): “Table A4: First-stage estimates: Non-Farm Income and Instruments (1) (2) (3) (4) (5) (6) Share village with roads −0.”
Remittances and Household Expenditure Patterns in Tajikistan: A Propensity Score Matching Analysis (2011, background): “Cardona Sosa and Medina (2006) find a similar result for Colombian households.”
Impact of Migration on Economic and Social Development: A Review of Evidence and Emerging Issues (2011, background): “There is a growing body of evidence suggesting that the income from remittances is disproportionally spent on education and health rather than everyday consumption (Adams 2005, Adams et al. 2008, World Bank 2006b, p. 126, Valero-Gil 2008; see Nagarajan 2009 for South Africa).”