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

37 Pages Posted: 9 Nov 2009

See all articles by Albert Bollard

Albert Bollard

Stanford University

David J. McKenzie

World Bank - Development Research Group (DECRG); IZA Institute of Labor Economics

Melanie Morten

Motu Economic and Public Policy Research Trust

Hillel Rapoport

Bar-Ilan University - Department of Economics; Stanford University

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Abstract

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.

Keywords: remittances, migration, brain drain, education

JEL Classification: O15, F22, J61

Suggested Citation

Bollard, Albert and McKenzie, David John and Morten, Melanie and Rapoport, Hillel, Remittances and the Brain Drain Revisited: The Microdata Show that More Educated Migrants Remit More. IZA Discussion Paper No. 4534, Available at SSRN: https://ssrn.com/abstract=1501970

Albert Bollard (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

David John McKenzie

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Melanie Morten

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

Hillel Rapoport

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 52900
Israel
+972 3 535 3180 (Fax)

Stanford University ( email )

Stanford, CA 94305
United States

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