Essays on Household Economics and Remittances.

Abstract

This dissertation investigates three questions related to how families make decisions about the allocation of scarce household resources. In the first chapter, I implement an experiment among Salvadoran migrants and their family members in El Salvador that examines how changing the ability of participants to monitor each other and revealing migrant preferences can affect remittance decisions. Migrants make a decision about how much of a cash windfall to keep and how much to send home, and recipients decide how to allocate the spending of a remittance. Migrants remit more when their choice is observed by recipients, supporting a model of remittance sending where migrants react strategically to being monitored. Recipients make spending choices closer to the migrants’ preferences when they are revealed, suggesting that recipients’ choices may be inadvertently affected by imperfect information on migrant preferences. In the second chapter, I examine how the exogenous change in income provided by eligibility for the South African pension can affect decision making in the household. I find that eligible females are substantially more likely to be the primary decision makers for expenditures than non-eligible females. There is no corresponding effect for eligible males. Due to labor force withdrawal, male income does not increase at the age of eligibility, providing an explanation for the lack of impacts of male eligibility on decision making. The increase in female decision-making power translates into improved nutrition for girls and higher levels of durable goods ownership. The third chapter, written jointly with Diego Aycinena and Dean Yang, studies the intersection of two research areas: educational subsidies and migrant remittances. We implement an experiment offering migrants cash subsidies for education, which are channeled directly to a beneficiary student chosen by the migrant. The subsidies lead to increases in educational expenditures, higher private school attendance, and lower labor supply of youths in the households connected to migrant study participants. We find substantial crowd in of household educational investments, particularly for female students. There is no evidence of shifting of expenditures from other students in the household, and the subsidy has no substantial effect on remittances.PHDEconomicsUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/99984/1/ambler_1.pd