The Effects of Remittances on School Enrollment Rates: A Global Perspective

There is already a large literature studying the effects of remittances on schooling. It finds that the effects are usually positive. But this literature focuses exclusively on developing countries. Here, we expand the coverage by using a large sample that additionally includes developed countries. We do so because the ultimate goal of scientific inquiry is to find general patterns or regularities that hold across a large number of cases. Therefore, we investigate whether the previous literature's finding holds across a large sample of developing and developed countries. Using data on 122 countries and two-stage least squares estimation to account for the endogeneity of remittances, our paper answers this question in the affirmative. Specifically, our results suggest that personal remittances from abroad had positive effects on school enrollment rates over the sample period 1978 to 2017, both at the primary and the secondary level. The magnitudes of the estimated effects are substantial at both levels. Whereas girls benefited more than boys at the primary level, both genders benefited equally at the secondary level. Thus the previous literature's finding that remittances normally improve schooling seems to be a truly global phenomenon, spanning the entirety of developing and developed countries.