Enhancing the Role of Remittances Through Social Capital : Evidence from Indonesian Household Data

Abstract

The main purpose of this study is to determine whether remittance-receiving households in Indonesia have truly experienced a measurable increase in their welfare. It focuses on how social capital may enhance the efforts of Indonesia’s female migrant workers to improve their and their family’s welfare at home. Our findings confirm that social capital enhances the impact of remittances by increasing the welfare of the migrant workers and their immediate family members. Remittance-receiving households with strong and wide-ranging social capital tend to use the extra income from remittances more for investment. In turn, this generates future income, which boosts the impacts of their remittances on their overall welfare.