THE IMPACT OF REMITTANCE VERSUS PARENTAL ABSENCE ON CHILDREN’S WELL-BEING IN RURAL PUNJAB

Abstract

This study aims to look at how migration impacts children back home in terms of schooling and child labor by quantifying both aspects of migration, i.e. remittance and parental absence. This paper particularly focuses on the case where the father is the migrant. A Panel Analysis is done using the Panel created by the “Multiple Indicator Cluster Survey (MICS)” 2007 and “Privatization in Education Research Initiative (PERI)” 2011. 820 households were used in the Analysis with the children falling within the age bracket of 5-14years. We use Instrumental Variable Approach along with Household Fixed Effects and Random Effects to deal with possible endogeneity. We use exogenous variation in the parental absence and remittances sent by the migrants in a Household's Kinship Network as an instrumental variable to identify the effect. A 1,000 rupees ($10) remittance increases the probability of being enrolled in school by 13 percentage points. Whereas, the absence of the father increases the probability of a child being engaged in child labor by 25 percentage points. We conclude that remittance does benefit but does not completely substitute for the absent father. This effect is particularly seen for children who already lacked a mother as well due to death or divorce. However, if the mother is present, she can fully compensate for the father‟s absence. Moreover, father‟s absence has more adverse consequences for girls in terms of increased child labor. Even the money coming in through remittance is spent favoring boys.