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

  • Frédéric Docquier

    ()

    (IRES, Université Catholique de Louvain, and FNRS)

  • Hillel Rapoport

    ()

    (Department of Economics, Bar-Ilan University, EQUIPPE, University of Lille, and Center for International Development, Harvard University)

  • Sara Salomone

    ()

    (IRES, Université Catholique de Louvain, and Tor Vergata University)

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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Paper provided by Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London in its series CReAM Discussion Paper Series with number 1119.

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Date of creation: Oct 2011
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Handle: RePEc:crm:wpaper:1119
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