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The study investigates the impact of migration and remittances on the financial behaviour of left behind family members in Sri Lanka, using data from the Household Income and Expenditure Survey (HIES) 2016. The analysis includes propensity score matching estimates and a three stage least squares estimates to examine the impact of having a migrant in the household or receiving remittances on the saving and borrowing behaviour of the left behind family members. A holistic view of the empirical findings of the study show that migration and remittances promote savings in left behind households, and the broader picture of debt repayment, indebtedness and loan income hints that migration and remittances make left behind family less likely to borrow, less likely to be indebted, and the more likely to be repaying debt. Such ongoing debt repayment is more likely to be associated with debt that was taken before migration (either to cover cost of migration or for some other reason unrelated to migration). This empirical evidence on capacity of migration and remittances to improve savings and reduce unproductive borrowing is found on the basis of the status quo in Sri Lanka - where minimal guidance is provided to left behind households on financial management. As such, exposure to appropriate interventions would enhance the capacity of migration and remittances to uplift the financial behaviour and related outcomes for left behind households. Such positive effects would have multiplier effects on all migration and remittances related outcomes at the household level and beyond.

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