Immigration Policy, Remittances, and Growth in the Migrant-Sending Country

CIRPEE Working Paper 09-15

35 Pages Posted: 14 May 2009

See all articles by Sylvain Dessy

Sylvain Dessy

Université Laval - Département d'Économique

Tiana Rambeloma

affiliation not provided to SSRN

Date Written: May 14, 2009

Abstract

As evidence accumulates to expose the ineffectiveness of foreign aid, there are increasing calls for rich countries to open up their immigration policies so as to enable migrants' remittances to substitute for foreign aid as a growth-stimulant in poor, migrant-sending countries. In this paper, we use an endogenous growth model to argue that the growth effects of transnational migration and remittances are entirely mediated by the human capital profile of emigrants, as determined by immigration policy at the destination country. Quantitatively we find that when immigration policy at the destination country provokes a "brain drain", growth is negatively impacted in the sending country despite remittances. The reverse is true when immigration policy targets workers with low levels of human capital.

Keywords: Remittances, migration, growth, education, general equilibrium, child labor

JEL Classification: J13, J61, O11, O15, O40

Suggested Citation

Dessy, Sylvain and Rambeloma, Tiana, Immigration Policy, Remittances, and Growth in the Migrant-Sending Country (May 14, 2009). CIRPEE Working Paper 09-15. Available at SSRN: https://ssrn.com/abstract=1404728 or http://dx.doi.org/10.2139/ssrn.1404728

Sylvain Dessy (Contact Author)

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada

Tiana Rambeloma

affiliation not provided to SSRN ( email )

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