# _IV.1. Educational Attainment_

The net impact of migration and remittances on human capital accumulation is a priori unclear. On one hand, migrant remittances can help overcome borrowing constraints that limit physical and human capital investments of poor households. On the other hand, migration of household members that precedes the receipt of remittances can have disruptive effects on family life, with potentially negative consequences on the educational attainment of children. Moreover, to the extent that in destination countries most migrants tend to work in occupations requiring limited schooling, the returns from investments in education may be lower for those that are envisaging international migration, which also could tend to reduce the schooling of children in migrants’ households. Similarly, migration can put pressure on wages at the home country, raising the opportunity cost of not working for older children. In any case, the direction of the relationship between remittances and child education would depend on idiosyncratic characteristics of each country.

Existing evidence on the impact of remittances on education in LAC is restricted to Mexico and El Salvador. Hanson and Woodruff (2003) find that remittances are associated with higher educational attainment in rural Mexico, in particular among 10-15 year old girls whose mothers have low educational levels. Lopez-Cordova (2005) shows that higher remittance flows are associated with lower illiteracy rates in Mexican municipalities, but the evidence on the impact on school attendance is mixed: the effect is positive only for 5-year olds, becoming insignificant among 6-14 years old and negative for those aged 15 to 17. McKenzie and Rapoport (2006), again for Mexico, show that children aged 16 to 18 from households with migrants exhibit lower educational attainment levels, and that this negative effect is larger for those whose mothers have higher levels of schooling. For the case of El Salvador, Cox-Edwards and Ureta (2003) show that children from remittance recipient households are less likely to drop out of school, which they attribute to the relaxation of budget constraints affecting poor recipient households. Acosta (2006) shows that this result is stronger for girls and younger boys in this country.

We would like to assess whether previous literature findings can apply to other countries in the region with significant remittances flows and available micro-data (Mexico, El Salvador, Nicaragua, Guatemala, Honduras, Haiti, Dominican Republic, Ecuador, Paraguay, Peru and Jamaica).<sup>7</sup> Disparities in secondary enrollment rates are large in the LAC region, ranging from about 80 percent in countries such as Chile and Argentina, to less than 50 percent in countries like Mexico, El Salvador, the Dominican Republic, Nicaragua, Honduras, Guatemala and Haiti (Figure 4), which are also among the top international migrant remittances receivers in the region.

The claim that remittances could potentially have an important effect on education, by overcoming borrowing constraints and allowing higher investment in children education is illustrated by the comparison of enrollment rates among children aged 12 to 17 across recipient and non-recipient households (Figure 5). With the only exception of Mexico, children from

> 7 Bolivia is excluded due to limited observations of children from remittance recipient households. Jamaica, not included in the previous section due to the lack of non-remittance income data in the corresponding survey, is included for the analysis of educational attainment.

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