South-South Migration: Remittances of Labour Migrants and Household Expenditures in Uzbekistan

We investigate the impact of international labour migrants' remittances on household expenditures in Uzbekistan as an understudied case of South-South migration. In doing so, we use instrumental variable regressions to address endogeneity caused by self-selection bias. We find that remittance-receiving households spend a significantly smaller part of their budgets on food and health. This finding contrasts with studies of South-South remittances in Africa that find that households tend to spend most of their remittance incomes on food. Our estimations also provide evidence that remittance-receiving households spend a larger part of their total expenditures on non-food consumption. Remittances' impact on healthcare expenditures is negative and on education expenditures is insignificant. These results support the view that remittances in this South-South migration corridor are channelled mainly to consumer goods, limiting their contribution to economic development.