GRM 2010 GRM 2011

Abstract Details

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International Remittances and Private Schooling: Evidence from India
Paper Proposal Text :
The inflow of international remittances to India has been increasing dramatically since the last two decades, making India the highest remittance receiving country in the world. India received an amount of US$ 71 billion as remittances in 2014 and the figure accounts for nearly 3 per cent of the country’s gross domestic product. Though India receives the highest amount of remittances, it is not highly dependent on remittances. However, the remittances are concentrated in certain states and have a very significant impact on regional economies. Among the Indian states, Kerala is the top remittance receiving state and received INR 497 billion in 2011, which constituted 31.2 per cent of the Net State Domestic Product (NSDP). Kerala is the second largest remittance dependent economy in the world, after Tajikistan. Moreover, the proportion of households receiving international remittances in Kerala increased from 12.2 per cent in 1993 to 16.3 per cent in 2007-08. This indicates that remittances have become an important external income sources not only for the economy, but also for remittance receiving households.
Theoretical studies suggest that migration of household members causes adult children to work in the local labour market to compensate for the household income that is forgone in the short-run due to the migration of the earning member of the household. In addition, the absence of parents due to migration also reduces parental support for acquiring education. Children have less time for schooling which will adversely affect school attendance. On the other hand, migrant remittances can alleviate budget constraints in the receiving households and increases the allocation of resources towards children’s education. Moreover, if migrant remittances increase household income, households may be less likely to rely on the additional income generated from children’s market or non-market work. As a result, children would have more time to attend school. Remittances can also lead to a shift in enrolment from public to private schools, where the parents believe their children will get quality education. The cost of education is high in private schools, which poses a higher burden on the households. Remittances can reduce the burden of the cost of education and allow families to send their children to private schools, which could enhance the quality of human capital.
There are several studies available in developing countries perspective that focuses on the relationship between international migration, remittances and children’s schooling. At India level, the existing studies are mainly focussed on the factors determining international migration and remittances, use of remittances and its impact on household consumption behaviour and investment patterns, poverty and inequality, health outcomes, labour force participation of left-behind family members. A few studies have analysed the impact of male out-migration on left- behind wives and their autonomy and household financial management. At the macro level, studies analysed the impact on unemployment, consumption, saving and economic growth. However, the impact of international migration on children’s private school enrolment has not been studied. Therefore, this study attempts to fill the gap.

This study used cross-sectional household survey data from the 2010 Kerala Migration Survey (KMS) and addressed the endogeneity of migration and remittances using an instrumental variable (IV) approach. Following the literature, this study used migration networks as an instrument for migration and remittances. We examine the impact of international remittance on private school enrolment of children aged 6-17 years. We further classify school enrolment of children aged 6-17 into primary, upper primary, secondary and higher secondary. The estimated results show that remittances have a positive and significant effect on private school enrolment of children aged 6-17 years. The impact is more significant in rural areas than in urban areas. While disaggregating the impact of remittances on different schooling levels, the estimated results show that the children that belong to the remittance-receiving households have a higher probability of enrolling their children’s in private schools at lower-primary, upper primary and higher secondary education levels.