Remittances and human capital investment: Evidence from Albania

Type Conference Paper - World Bank International Conference on Poverty and Social Inclusion in the Western Balkans
Title Remittances and human capital investment: Evidence from Albania
Publication (Day/Month/Year) 2010
City Brussels
Country/State Belgium
During the last two decades, South-East European countries have experienced a large increase in the number of people migrating to more developed countries. With a large portion of their population abroad, these countries are highly dependent on remittances, which in the case of Albania far exceed Foreign Direct Investments. Using household survey data for Albania, this study 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 proportional hazard 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. In the model, 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.

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