Gender Specific Patterns of Spending Remittances and their Implications for Development: Evidence from Bosnia and Herzegovina

Abstract

Remittances are an important tool to combat poverty and stimulate local development. They are an important part of today’s global economy and for some developing countries com- prise a significant percent of GDP. Remittances in Bosnia’s economy were equivalent to 11 percent of GDP in 2013. One out of every twenty households receives remittances. Prior lit- erature demonstrates that gender influences the spending remittances. Women tend to spend remittances more on food and education while men on consumer goods. This paper examines how gender determines remittance expenditures in Bosnia and Herzegovina. Using the World Bank’s LSMS household survey data from 2004, I develop an IV regression and Tobit model, using the share of household receiving remittances and wealth index as instrumental variables. I also used a probit model to examine determinants of receiving remittances. The results confirm the prior literature: women spend more on education, food, and overall consumption, while men spend more on durable goods, health, and cable subscriptions. These results indicate that females receiving remittances do more to help maximize positive benefits of remittances on the development in Bosnia.