IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Migrant Remittances, Human Capital Formation and Job Creation Externalities in Colombia

Listed author(s):
  • Maurice Kugler

    ()

In this paper we model the effect of migrant remittances on job creation and human capital formation, given migration prospects. Model calibration of deep parameters was performed with data from the AMCO survey on migration and remittances. The simulations based on the model show that remittances can have offsetting effects on equilibrium human capital and labor market out- comes in the country of origin of migrants. First, remittances enhance school- ing opportunities for recipient households, and human capital formation can be augmented. Second, an increase in human capital supply by recipient house- holds induces job creation as labor demand increases in the origin country. If a sufficiently large share of remittance recipients do not migrate, then the net effect is brain gain rather than brain drain ensuing remittances. The job cre- ation spillover in local labor markets increases the rate of return to schooling for nonrecipient households, whose members are less likely to migrate. As a result, there are more incentives to substitute consumption for human capital investment. At the same time, the rise in expected income due to the spillover induces higher desired consumption. If the “substitution effect” outweighs the “income effect”, then remittances will increase overall human capital and re- duce the unemployment rate. The calibration and simulation analyses suggest that he net effect of remittances depends upon the accessibility of education and the degree and labor market frictions in the origin country as well as the immigration policy in the destination country of migrants.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.banrep.gov.co/docum/ftp/borra370.pdf
Download Restriction: no

Paper provided by Banco de la Republica de Colombia in its series Borradores de Economia with number 370.

as
in new window

Length:
Date of creation:
Handle: RePEc:bdr:borrec:370
Contact details of provider: Postal:
Cra 7 # 14-78 Semi-sótano

Phone: (57-1) 3431111
Fax: (57-1) 2841686
Web page: http://www.banrep.gov.co/es/publicaciones-buscador/23
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window

  1. Kong-Pin Chen & Shin-Hwang Chiang & Siu-Fai Leung, 2002. "Migration, Family, and Risk Diversification," Working Papers 2002_01, York University, Department of Economics.
  2. Gordon H. Hanson & Raymond Robertson & Antonio Spilimbergo, 1999. "Does Border Enforcement Protect U.S. Workers from Illegal Immigration?," NBER Working Papers 7054, National Bureau of Economic Research, Inc.
  3. Miguel León-Ledesma & Matloob Piracha, 2001. "International Migration and the Role of Remittances in Eastern Europe," Studies in Economics 0113, School of Economics, University of Kent.
  4. Ugo Panizza & Eduardo Lora, 2002. "Structural Reforms in Latin America under Scrutiny," IDB Publications (Working Papers) 80318, Inter-American Development Bank.
  5. Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, vol. 86(1), pages 29-46, October.
  6. Eduardo Lora, 2001. "Structural Reforms in Latin America: What Has Been Reformed and How to Measure It," Research Department Publications 4293, Inter-American Development Bank, Research Department.
  7. Marimon, Ramon & Zilibotti, Fabrizio, 1998. "Unemployment vs. Mismatch of Talents: Reconsidering Unemployment Benefits," Seminar Papers 661, Stockholm University, Institute for International Economic Studies.
  8. Gordon H. Hanson, 2007. "Emigration, Labor Supply, and Earnings in Mexico," NBER Chapters, in: Mexican Immigration to the United States, pages 289-328 National Bureau of Economic Research, Inc.
  9. Gordon H. Hanson, 2007. "Emigration, remittances and labor force participation in Mexico," INTAL Working Papers 1456, Inter-American Development Bank, INTAL.
  10. Oded Stark & Christian Helmenstein & Alexia Prskawetz, 1998. "Human Capital Depletion, Human Capital Formation, and Migration: A Blessing in a "Curse"?," Departmental Working Papers _096, Chinese University of Hong Kong, Department of Economics.
  11. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
  12. Hanson, G.H. & Spilimbergo, A., 1999. "Political Economy, Sectoral Shocks, and Border Enforcement," Working Papers 449, Research Seminar in International Economics, University of Michigan.
  13. Michel Beine & Frédéric Docquier & Hillel Rapoport, 2001. "Brain drain and economic growth: theory and evidence," ULB Institutional Repository 2013/10449, ULB -- Universite Libre de Bruxelles.
  14. Glytsos, Nicholas P, 1993. "Measuring the Income Effects of Migrant Remittances: A Methodological Approach Applied to Greece," Economic Development and Cultural Change, University of Chicago Press, vol. 42(1), pages 131-168, October.
  15. George J. Borjas, 1994. "The Economic Benefits from Immigration," NBER Working Papers 4955, National Bureau of Economic Research, Inc.
  16. Alejandro Gaviria & Carolina Mejía, 2005. "Las varias caras de la diáspora: los nexos de los migrantes colombianos con su país de origen," DOCUMENTOS CEDE 006882, UNIVERSIDAD DE LOS ANDES-CEDE.
  17. Suzanne Duryea & Carmen Pagés, 2002. "Human Capital Policies: What they Can and Cannot Do for Productivity and Poverty Reduction in Latin America," IDB Publications (Working Papers) 4125, Inter-American Development Bank.
  18. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A brain gain with a brain drain," Economics Letters, Elsevier, vol. 55(2), pages 227-234, August.
  19. Bauer, Thomas & Epstein, Gil S & Gang, Ira, 2002. "Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the US," CEPR Discussion Papers 3505, C.E.P.R. Discussion Papers.
  20. Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 1-76.
  21. Alejandro Gaviria, 2004. "Visa Usa: Fortunas Y Extravíos De Los Emigrantes Colombianos En Los Estados Unidos," DOCUMENTOS CEDE 003766, UNIVERSIDAD DE LOS ANDES-CEDE.
  22. Manon Domingues Dos Santos & Fabien Postel-Vinay, 2003. "Migration as a source of growth: The perspective of a developing country," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(1), pages 161-175, 02.
  23. Ximena Cadena Ordóñez & Mauricio Cárdenas Santa María, 2004. "Las remesas en Colombia: costos de transacción y lavado de dinero," WORKING PAPERS SERIES. DOCUMENTOS DE TRABAJO 003127, FEDESARROLLO.
  24. McCormick, Barry & Wahba, Jackline, 2000. "Overseas Employment and Remittances to a Dual Economy," Economic Journal, Royal Economic Society, vol. 110(463), pages 509-534, April.
  25. Adams, Richard H, Jr, 1998. "Remittances, Investment, and Rural Asset Accumulation in Pakistan," Economic Development and Cultural Change, University of Chicago Press, vol. 47(1), pages 155-173, October.
  26. Funkhouser, Edward, 1995. "Remittances from International Migration: A Comparison of El Salvador and Nicaragua," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 137-146, February.
  27. Donald R. Davis & David E. Weinstein, 2002. "Technological Superiority and the Losses from Migration," NBER Working Papers 8971, National Bureau of Economic Research, Inc.
  28. Djajic, Slobodan, 1986. "International migration, remittances and welfare in a dependent economy," Journal of Development Economics, Elsevier, vol. 21(2), pages 229-234, May.
  29. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  30. George J. Borjas, 2001. "Does Immigration Grease the Wheels of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 69-134.
  31. Barro, Robert J & Lee, Jong Wha, 1996. "International Measures of Schooling Years and Schooling Quality," American Economic Review, American Economic Association, vol. 86(2), pages 218-223, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bdr:borrec:370. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Clorith Angélica Bahos Olivera)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.