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

  • Bollard, Albert

    ()

    (Stanford University)

  • McKenzie, David

    ()

    (World Bank)

  • Morten, Melanie

    ()

    (Yale University and Federal Reserve Bank of Minneapolis)

  • Rapoport, Hillel

    ()

    (Paris School of Economics)

Two of the most salient trends surrounding the issue of migration and development over the last two decades are the large rise in remittances, and an increased flow of skilled migration. 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 hamper remittance growth. We revisit the relationship between education and remitting behavior using microdata from surveys of immigrants in eleven major destination countries. The data show a mixed pattern between education and the likelihood of remitting, and a strong positive relationship between education and the amount remitted conditional on remitting. Combining these intensive and extensive margins gives an overall positive effect of education on the amount remitted. The microdata then allow investigation as to why the more educated remit more. We find the higher income earned by migrants, rather than characteristics of their family situations explains much of the higher remittances.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4534.

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Length: 37 pages
Date of creation: Oct 2009
Date of revision:
Publication status: published in: World Bank Economic Review, 2011, 25 (1), 132 - 156
Handle: RePEc:iza:izadps:dp4534
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  1. Riccardo Faini, 2006. "Remittances and the brain drain," Development Working Papers 214, Centro Studi Luca d\'Agliano, University of Milano.
  2. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
  3. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
  4. Yoko NIIMI & Caglar OZDEN & Maurice SCHIFF, 2010. "Remittances and the Brain Drain: Skilled Migrants Do Remit Less," Annales d'Economie et de Statistique, ENSAE, issue 97-98, pages 123-141.
  5. 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.
  6. 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.
  7. World Bank, 2008. "The Migration and Remittances Factbook 2008," World Bank Publications, The World Bank, number 6383.
  8. 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.
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