The Effect of Remittances on Children’s Health Expenditures in Ecuador

Abstract

We evaluate the impact of remittances on family expenditures and anthropometric health indicators for Ecuadorean children 0-5 years old, using data for the 2005-2006 and 2013-2014 periods. We employ an instrumental variable approach and split the data across wealth, gender, and rural vs urban dimensions. We find positive and significant effects of remittances on overall expenditures, food consumption, and expenditures in health. We also find positive results for children in the top half of the wealth distribution and no effects on the poorer half. Across gender, males seem to benefit more than females, while children in rural areas see larger effects relative to those in urban areas.