Internal Remittances, Household Welfare, Spending Patterns and Labour Supply: A Study from Rural Areas of Hailakhandi District of South Assam.

This paper uses primary data collected from 325 rural households in one of the remote but densely populated districts of Assam, India, to evaluate the impact of internally generated remittances on household welfare, spending patterns and labour supply decisions of left-behind adult family members. Using selectivity-corrected covariate balancing propensity score matching method and also endogeneity-corrected instrumental variable analysis, the study finds that remittances from kith and kin residing elsewhere in the country serve to increase the monthly per-capita consumption expenditure of rural households and help to lower the level, depth and severity of poverty. Remittances have also been observed to influence household spending patterns with higher proportion of annual expenditure being devoted to food and education by recipient households. In the labour market, remittances are found to give rise to a 'dependency syndrome' as adult members belonging to remittance-receiving households were less likely to enter the labour market. However, no significant adverse impact of remittances on labour intensity by employed workers was observed. Remittances were also found to be lowering the probability of workers being engaged as casual daily wage labourers while enhancing the likelihood of salaried employment and agricultural and non-agricultural businesses. [ABSTRACT FROM AUTHOR]