Remittance Inflows and Educational outcomes in Kenya.

Abstract

The impact of remittance on educational outcomes is of interest since human capital development may break the generation to generation transmission of poverty through higher incomes in the future. Therefore, this paper analyzed the effect of remittances on educational outcomes in Kenya using data from the 2009 Kenya Migration Household survey. The study also analyzed if there are differences in educational outcomes amongst males and females due to remittances. The relationship was tested using an ordered probit and ordered IV probit approach with the number of individuals above 65 years of age in the households and owning a bank account as instruments. From the results, remittances have a significant and positive impact on the education of household members at primary, secondary, and tertiary levels of education with the probability being much higher at the primary level. The marginal impact of remittances on the level of education completed was positive and statistically significant for males while negative for the males hence contributing to higher gender inequalities in education. Therefore, policies towards increasing remittances via regulations in the financial sector that would help lower transaction costs associated with remittances should be enhanced.