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Remittances and investment in education: Evidence from Ghana

This paper uses both cross-section and pseudo-panel data to investigate the effects of remittances on investment in education in Ghana. We find that remittances significantly increase the probability that families enroll their children in primary and secondary schools, suggesting that remittances increase education human capital formation. The impact of remittances on the probability of primary and secondary school enrollment is particularly strong for international remittance. In addition, there is evidence that remittances to female-headed households increase education investment more than do remittances to male-headed households. We interpret our results to mean that international remittances improve prospects for economic growth and decrease poverty in the long run through the human capital channel. Our results are robust to sample and estimation method.