Effects of Remittance Flows on the School Attainment of Household Members Left Behind

Abstract

Using household survey data for Albania, this paper compare decision-making about human capital investment in remittance-receiving households and non-remittance-receiving households. The Cox proportional hazard model is used to capture the effects of remittances. The crucial assumption in the model is that the effect of the covariates is proportional over the entire base line. The vector of covariates includes information such as; children’s demographic characteristics, parental schooling, household income and the presence of remittances. Household incomes are considered separately from remittances in order to identify whether income from remittances have the same effect as other types of household non-labour income in the decision to invest in more years of schooling for household members. The estimation of the survival function indicates that receiving remittances from household members working abroad increases the hazard of leaving school after the end of secondary education. The negative relationship between education and remittances is more evident for males living in rural areas.

DOI: 10.5901/ajis.2014.v3n6p527