Impact of Remittances on Poverty and Educational Attainment: The Peruvian Case

This paper uses a large, nationally representative household survey to examine the impact of international migration and remittances on poverty and educational attainment in Peru. Using predicted equations to estimate the incomes of households with and without remittances, the paper finds that the possibility of migrate and send remittances reduces the level, depth and severity of poverty in Peru. In addition, this paper also finds a strong and positive impact of international migration and remittances on schooling attainment. Impact effects estimates for a IV censored ordered probit shows that living in a migrant household has different effects at different levels of schooling, but there is always a positive correlation between belonging to a household that receive remittances and higher educational attainment. These results are consistent with international migration and remittances having a positive effect on education by helping to relax household credit constraints