ABSTRACT
The inflow of international remittances to Kerala has been increasing over the last three decades. Remittances increased household income and enabled the recipient families to spend more in human and physical capital. This study examines the impact of remittances on households’ healthcare expenditure in Kerala. Using data from Kerala Migration Survey 2010 and employing the instrumental variable approach to account for the endogeneity of remittance receipt, this study found that remittance income has a positive and significant impact on households’ health expenditure. After disaggregating the sample into different heterogeneous groups, this study found that remittances have a greater effect on lower-income households and households belonging to the general category but not SC/ST households, as they remain excluded from reaping the benefit of international migration.
