We study the impact of remittances on human capital investment in the Philippines,
where international remittances accounted for approximately 10 percent of
the GDP in 2003 (Goldin and Reinert, 2007). The additional incomes from
remittances potentially allow the children of emigrant workers to go to school, but
this may also mean that the emigrant parents cannot take care of their children by
themselves. Even though this consideration is neglected in the published literature,
it is important because there may be negative guardian effects. That is,
children in a household headed by someone other than their own parent may not
receive sufficient parental input. Second, the remittances sent by the emigrant
parents may not necessarily benefit their children if the receiving household in the
home country uses them in an unintended way