Do Smarter Workers Remit Less? Survey Evidence from Latin America
Loyola Marymount University - Department of Finance
affiliation not provided to SSRN
November 11, 2011
Global Business and Finance Review, Fall 2011, pp. 118-135
This paper examines the link between intelligence and remittance levels using an exam to measure intelligence. With a survey of 117 migrant-remitters living in metropolitan Los Angeles, California, we find a negative correlation between the workers’ level of intelligence and the amount they remit, both in dollar terms and as a percentage of their income: Smarter workers remit less. This finding is true even after controlling for common factors that dictate the level of remittances such as the relationship to the recipient and the relative wealth of the family back home. We find a negative correlation between intelligence and remittances, even though our sample is predominantly comprised of low-skilled workers. It appears that this negative correlation is a robust finding and not limited to populations with a large proportion of college-educated workers. This finding makes the brain drain a more complicated issue because there is no clear educational cut-off point at which policy-makers can aim their actions.
Number of Pages in PDF File: 18
Keywords: remittances, brain drain, intelligence, development economics, Latin America
JEL Classification: E2, E21, E24, F00, F2, F22, F36, J61, O1, O15, O19, O23, O54
Date posted: April 19, 2012
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