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Remittances and the Brain Drain Revisited: The Microdata Show That More Educated Migrants Remit More

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  • Albert Bollard
  • David McKenzie
  • Melanie Morten
  • Hillel Rapoport

Abstract

Two of the most salient trends in migration and development over the last two decades are the large rise in remittances and in the flow of skilled migrants. However, recent literature based on cross-country regressions has claimed that more educated migrants remit less, leading to concerns that further increases in skilled migration will impede remittance growth. Microdata from surveys of immigrants in 11 major destination countries are used to revisit the relationship between education and remitting behavior. The data show a mixed pattern between education and the likelihood of remitting, and a strong positive relationship between education and amount remitted (intensive margin), conditional on remitting at all (extensive margin). Combining these intensive and extensive margins yields an overall positive effect of education on the amount remitted for the pooled sample, with heterogeneous results across destinations. The microdata allow investigation of why the more educated remit more, showing that the higher income earned by migrants, rather than family characteristics, explains much of the higher remittances. Copyright , Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/wber/lhr013
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Bibliographic Info

Article provided by World Bank Group in its journal The World Bank Economic Review.

Volume (Year): 25 (2011)
Issue (Month): 1 (May)
Pages: 132-156

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Handle: RePEc:oup:wbecrv:v:25:y:2011:i:1:p:132-156

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  1. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
  2. World Bank, 2008. "The Migration and Remittances Factbook 2008," World Bank Publications, The World Bank, number 6383, 5.
  3. Riccardo Faini, 2006. "Remittances and the brain drain," Development Working Papers 214, Centro Studi Luca d\'Agliano, University of Milano.
  4. Donald Cox & Zekeriya Eser & Emmanuel Jimenez, 1996. "Motives for Private Transfers over the Life Cycle: An Analytical Framework and Evidence for Peru," Boston College Working Papers in Economics 327., Boston College Department of Economics.
  5. Riccardo Faini, 2007. "Remittances and the Brain Drain: Do More Skilled Migrants Remit More?," World Bank Economic Review, World Bank Group, vol. 21(2), pages 177-191, May.
  6. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
  7. Luis Miotti & El Mouhoub Mouhoud & Joel Oudinet, 2009. "Migrations And Determinants Of Remittances To Southern Mediterranean Countries: When History Matters !," Post-Print hal-00483303, HAL.
  8. Niimi, Yoko & Ozden, Caglar & Schiff, Maurice, 2008. "Remittances and the Brain Drain: Skilled Migrants Do Remit Less," IZA Discussion Papers 3393, Institute for the Study of Labor (IZA).
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