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Do Smarter Workers Remit Less? Survey Evidence from Latin America

Global Business and Finance Review, Fall 2011, pp. 118-135

18 Pages Posted: 19 Apr 2012  

David Offenberg

Loyola Marymount University - Department of Finance

Mauricio Rivera

affiliation not provided to SSRN

Date Written: November 11, 2011

Abstract

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.

Keywords: remittances, brain drain, intelligence, development economics, Latin America

JEL Classification: E2, E21, E24, F00, F2, F22, F36, J61, O1, O15, O19, O23, O54

Suggested Citation

Offenberg, David and Rivera, Mauricio, Do Smarter Workers Remit Less? Survey Evidence from Latin America (November 11, 2011). Global Business and Finance Review, Fall 2011, pp. 118-135. Available at SSRN: https://ssrn.com/abstract=2042283

David Offenberg (Contact Author)

Loyola Marymount University - Department of Finance ( email )

1 LMU Dr.
MS 8385
Los Angeles, CA 90045
United States

HOME PAGE: http://cba.lmu.edu/faculty?expert=david.offenbergphd

Mauricio Rivera

affiliation not provided to SSRN ( email )

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