Remittances, Liquidity Constraints and Human Capital Investments in Ecuador
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Over the last decade Ecuador has experienced a strong increase in ﬁnancial transfers from migrated workers. This paper investigates how remittances via trans-national networks aﬀect human capital investments through relaxing resource constraints and facilitate households in consumption smoothing by reducing vulnerability to economic shocks. Our results show that remittances in- crease school enrollment and decrease incidence of child work, especially for girls and in rural areas. Furthermore, we ﬁnd that aggregate shocks are associated with increased work activities, while remittances are used to ﬁnance education when households are faced with these shocks.