Subsidizing Remittances for Education: A Field Experiment Among Migrants from El Salvador* Kate Ambler, University of Michigan Diego Aycinena, Universidad Francisco Marroquín Dean Yang, University of Michigan, NBER, and BREAD July 2013 Abstract We study the intersection of two research areas: educational subsidies and migrant remittances. We implement a randomized experiment offering Salvadoran migrants subsidies for education, which are channeled directly to a beneficiary student in El Salvador chosen by the migrant. The subsidies – in the form of matching grants – lead to increases in educational expenditures, higher private school attendance, and lower labor supply of youths in El Salvador households connected to migrant study participants. We find substantial “crowd in” of household educational investments, particularly for female students: for each $1 received by female beneficiary students, educational expenditures on that student increase by close to $5. There is no evidence of shifting of educational expenditures from other students in the household to the target student, and the subsidy has no substantial effect on remittances sent by the migrant. Keywords: education, subsidy, crowd in, migration, remittances, transnational household, El Salvador JEL Codes: C93, F22, F24, H24, I22, J15, O15 * Ambler: Department of Economics, University of Michigan (
[email protected]). Aycinena: Department of Economics, Universidad Francisco Marroquin (
[email protected]). Yang (corresponding author): Department of Economics and Gerald R. Ford School