Migration, Remittances and Human Capital Investment in Kenya

Type Working Paper
Title Migration, Remittances and Human Capital Investment in Kenya
Author(s)
Publication (Day/Month/Year) 2014
URL http://blogs.colgate.edu/economics/files/2014/09/Hines-2014-Migration-Remittances-and-Human-Capital-​Investment-in-Kenya.pdf
Abstract
This paper investigates the impact of migration and remittances on household human capital investment in Kenya. First, I develop a theoretical model predicting that remittances act as a mechanism for transmitting income from migrants to their households and will affect expenditure patterns similarly to other sources of income. Using data from the 2009 Kenya Migration Household Survey to test this hypothesis, I find a positive relationship between the amount of remittances a household receives and the level of education expenditures in that household. However, I do not find a correlation between remittances and the share of total expenditures allocated to education, indicating that the positive relationship between remittances and human capital investment related to remittances may be reflecting an income effect, rather than substitution away from other goods.

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