Revisiting the Impacts on Human Capital and Labour Force Participation with Transitory Remittances

Abstract

Remittances can occur on a transitory basis due to motives related to insurance and investment; therefore, studies using cross-sectional information can omit populations that have received remittances in the past. This paper examines the impact of this omission in the case of Mexico. The proportion of the population living in households receiving remittances increases by almost a factor of two when we consider past periods. This additional population includes relatively more urban residents with higher socio-economic status and households with male household heads. However, when estimating the impact of remittances in labour force participation and school attendance, there is no difference when using an estimate defining the group of households receiving remittances similarly to studies using cross-sectional data in previous literature.