The Impact of Skill Mismatch among Migrants on Remittance Behaviour

This paper considers the issue of skill mismatch among immigrants and its impact on their remittance behaviour using cross-sectional data from two linked surveys in the Philippines: the Survey on Overseas Filipinos (SOF) and the Family Income and Expenditure Survey (FIES) for the years 1997, 2000, and 2003. Our main hypothesis is that skills mismatch - broadly defined here as the over-qualification of migrants in terms of educational attainment relative to occupation in their destination country - is prevalent among skilled migrants and exerts a downward pressure on the level of international remittances received by the sending economies. Accordingly, a high incidence of skill mismatch implies that the remittances expatriated would be significantly less compared to conditions of no skills mismatch. We find evidence of substantial skill mismatch, particularly among highly educated women, but there is also systematic variation in the incidence of skill mismatch by family characteristics and host country. In terms of remittances, we find that for women, higher education levels are associated with lower incidence of remittances but larger amounts remitted. However, negative skill mismatch leads to men and women both being more likely to remit money, but for women the amount is significantly less than it otherwise would have been.