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Remittances, Migrants’ Education and Immigration Policy: Theory and Evidence from Bilateral Data

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Author Info

  • Frédéric Docquier
  • Hillel Rapoport

    () (Bar-Ilan University)

  • Sara Salomone

Abstract

We investigate the relationship between remittances and migrants’ education both theoretically and empirically, using original bilateral remittance data. At a theoretical level we lay out a model of remittances interacting migrants’ human capital with two dimensions of immigration policy: restrictiveness, and selectivity. The model predicts that the relationship between remittances and migrants’ education is ambiguous and depends on the immigration policy conducted at destination. The effect of education is more likely to be positive when the immigration policy is more restrictive and less skill-selective. These predictions are then tested empirically using bilateral remittance and migration data and proxy measures for the restrictiveness and selectivity of immigration policies at destination. The results strongly support the theoretical analysis, suggesting that immigration policies determine the sign and magnitude of the relationship between remittances and migrants’ education.

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File URL: http://econ.biu.ac.il/files/economics/working-papers/2011-27.pdf
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Bibliographic Info

Paper provided by Department of Economics, Bar-Ilan University in its series Working Papers with number 2011-27.

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Length: 42 pages
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:biu:wpaper:2011-27

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Postal: Faculty of Social Sciences, Bar Ilan University 52900 Ramat-Gan
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Web page: http://econ.biu.ac.il
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Keywords: Remittances; Migration; Brain Drain; Immigration Policy.;

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References

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  1. Docquier, Frédéric & Lowell, B. Lindsay & Marfouk, Abdeslam, 2007. "A Gendered Assessment of the Brain Drain," IZA Discussion Papers 3235, Institute for the Study of Labor (IZA).
  2. Albert Bollard & David McKenzie & Melanie Morten & Hillel Rapoport, 2011. "Remittances and the Brain Drain Revisited: The Microdata Show That More Educated Migrants Remit More," World Bank Economic Review, World Bank Group, vol. 25(1), pages 132-156, May.
  3. Michéle V.K. Belot & Timothy J. Hatton, 2008. "Immigrant Selection in the OECD," CEPR Discussion Papers 571, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  4. Jeffrey A. Frankel, 2009. "Are Bilateral Remittances Countercyclical?," NBER Working Papers 15419, National Bureau of Economic Research, Inc.
  5. Jose De Sousa & Laetitia Duval, 2010. "Geographic Distance and Remittances in Romania: Out of Sight, Out of Mind?," Economie Internationale, CEPII research center, issue 121, pages 81-98.
  6. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
  7. David McKenzie & Hillel Rapoport, 2010. "Self-Selection Patterns in Mexico-U.S. Migration: The Role of Migration Networks," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 811-821, November.
  8. Erik Lueth & Marta Ruiz-Arranz, 2008. "Determinants of Bilateral Remittance Flows," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 26.
  9. Freund, Caroline & Spatafora, Nikola, 2005. "Remittances : transaction costs, determinants, and informal flows," Policy Research Working Paper Series 3704, The World Bank.
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  12. Nava Ashraf & Diego Aycinena & Claudia Martínez & Dean Yang, 2011. "Remittances and the Problem of Control: A Field Experiment Among Migrants from El Salvador," Working Papers wp341, University of Chile, Department of Economics.
  13. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, 04.
  14. Francesc Ortega & Giovanni Peri, 2009. "The Causes and Effects of International Labor Mobility: Evidence from OECD Countries 1980-2005," Human Development Research Papers (2009 to present) HDRP-2009-06, Human Development Report Office (HDRO), United Nations Development Programme (UNDP), revised Apr 2009.
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  21. Dustmann, Christian & Mestres, Josep, 2010. "Remittances and temporary migration," Journal of Development Economics, Elsevier, vol. 92(1), pages 62-70, May.
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Cited by:
  1. Assaf Razin & Jackline Wahba, 2012. "Welfare Magnet Hypothesis, Fiscal Burden and Immigration Skill Selectivity," Norface Discussion Paper Series 2012036, Norface Research Programme on Migration, Department of Economics, University College London.
  2. Kahanec, Martin, 2012. "Report No. 49: Skilled Labor Flows: Lessons from the European Union," IZA Research Reports 49, Institute for the Study of Labor (IZA).

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