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The Impact of Skill Mismatch among Migrants on Remittance Behaviour

Author

Listed:
  • James Ted McDonald
  • M. Rebecca Valenzuela

Abstract

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.

Suggested Citation

  • James Ted McDonald & M. Rebecca Valenzuela, 2009. "The Impact of Skill Mismatch among Migrants on Remittance Behaviour," Social and Economic Dimensions of an Aging Population Research Papers 242, McMaster University.
  • Handle: RePEc:mcm:sedapp:242
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    File URL: http://socserv.mcmaster.ca/sedap/p/sedap242.pdf
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    References listed on IDEAS

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    1. Aubrey D. Tabuga, 2007. "International Remittances and Household Expenditures : The Philippine Case," Development Economics Working Papers 22698, East Asian Bureau of Economic Research.
    2. Yevgeny Kuznetsov, 2006. "Diaspora Networks and the International Migration of Skills : How Countries Can Draw on their Talent Abroad," World Bank Publications, The World Bank, number 7008, June.
    3. Friedberg, Rachel M, 2000. "You Can't Take It with You? Immigrant Assimilation and the Portability of Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 221-251, April.
    4. Manacorda, Marco & Petrongolo, Barbara, 1999. "Skill Mismatch and Unemployment in OECD Countries," Economica, London School of Economics and Political Science, vol. 66(262), pages 181-207, May.
    5. 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.
    6. Michel Beine & Frédéric Docquier & Hillel Rapoport, 2007. "Measuring International Skilled Migration: A New Database Controlling for Age of Entry," World Bank Economic Review, World Bank Group, vol. 21(2), pages 249-254, June.
    7. Binod Khadria, 2006. "Migration between India and The UK," Public Policy Review, Institute for Public Policy Research, vol. 13(3), pages 172-184.
    8. Riccardo Faini, 2006. "Remittances and the brain drain," Development Working Papers 214, Centro Studi Luca d'Agliano, University of Milano.
    9. Ana Ferrer & W. Craig Riddell, 2008. "Education, credentials, and immigrant earnings," Canadian Journal of Economics, Canadian Economics Association, vol. 41(1), pages 186-216, February.
    10. Green, Colin & Kler, Parvinder & Leeves, Gareth, 2007. "Immigrant overeducation: Evidence from recent arrivals to Australia," Economics of Education Review, Elsevier, vol. 26(4), pages 420-432, August.
    11. Ernesto M. Pernia, 2006. "Diaspora, Remittances, and Poverty in RP’s Regions," UP School of Economics Discussion Papers 200602, University of the Philippines School of Economics.
    12. Siegfried, Nikolaus & Schiopu, Ioana, 2006. "Determinants of workers' remittances: evidence from the European Neighbouring Region," Working Paper Series 688, European Central Bank.
    13. Van Houtven, Courtney Harold & Norton, Edward C., 2004. "Informal care and health care use of older adults," Journal of Health Economics, Elsevier, vol. 23(6), pages 1159-1180, November.
    14. Edgard R. Rodriguez & Susan Horton, 1995. "International Return Migration and Remittances in the Philippines," Working Papers horton-95-01, University of Toronto, Department of Economics.
    15. Tabuga, Aubrey D., 2007. "International Remittances and Household Expenditures: the Philippine Case," Discussion Papers DP 2007-18, Philippine Institute for Development Studies.
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    Cited by:

    1. Matloob Piracha & Florin Vadean, 2013. "Migrant educational mismatch and the labor market," Chapters,in: International Handbook on the Economics of Migration, chapter 9, pages 176-192 Edward Elgar Publishing.

    More about this item

    Keywords

    remittances; immigrants; education mismatch;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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