Remittances are used by poor households to pay for food, nondurables, housing, and also for human development, that is, for paying for schools and for health services.
Pablo Fajnzylber: Remittances are used by poor households to pay for food, non-durables, housing, and also for human development, that is, for paying for schools and for health services. In fact, we find that poor families in most of the Latin American countries for which we have data, when they receive remittances, they spend a higher percentage of their income in human development, that is, in education and health--than families with similar levels of income and demographic characteristics that don't receive remittances.
So, in practice, remittances are used for human development, and we find kids from families that receive remittances stay a longer number of years in school, and their families also have access to better quality health services, so there is, in practice, naturally a positive effect on human development. Whether governments can do something to increase that impact, the answer is yes, however, it is not clear whether government policies should be directed only to those who receive remittances or should be directed to the population that is in need of those services at large.
Date: 7 Nov 2006
Given in this interview: Development Impact of Remittances in Latin America
