Remittances and the Brain Drain: Skilled Migrants Do Remit Less

26 Pages Posted: 23 May 2008

See all articles by Yoko Niimi

Yoko Niimi

Doshisha University; Asian Growth Research Institute

Caglar Ozden

World Bank - Research Department

Maurice Schiff

Fellow, Institute for the Study of Labor (IZA)

Abstract

It has been argued that the brain drain's negative impact may be offset by the higher remittance levels skilled migrants send home. This paper examines whether remittances actually increase with migrants' education level. The determinants of remittances it considers include migration levels or rates, migrants' education level, and source countries' income, financial sector development and expected growth rate. The estimation takes potential endogeneity into account, an issue not considered in the few studies on this topic. Our main finding is that remittances decrease with the share of migrants with tertiary education. This provides an additional reason for which source countries would prefer unskilled to skilled labor migration. Moreover, as predicted by our model, remittances increase with source countries' level and rate of migration, financial sector development and population, and decrease with these countries' income and expected growth rate.

Keywords: migration, remittances, education level, brain drain

JEL Classification: F22, F24, J61, O15, O16

Suggested Citation

Niimi, Yoko and Özden, Çaglar and Schiff, Maurice W., Remittances and the Brain Drain: Skilled Migrants Do Remit Less. IZA Working Paper No. 3393, Available at SSRN: https://ssrn.com/abstract=1136198 or http://dx.doi.org/10.2139/ssrn.1136198

Yoko Niimi (Contact Author)

Doshisha University ( email )

Imadegawa-agaru, Shinmachi-dori, Kamigyo-ku
Kyoto, Kyoto 602-0047
Japan

Asian Growth Research Institute ( email )

11-4 Ohtemachi, Kokurakita-ku
Kitakyushu, Fukuoka 803-0814
Japan

Çaglar Özden

World Bank - Research Department ( email )

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

HOME PAGE: http://econ.worldbank.org/staff/cozden

Maurice W. Schiff

Fellow, Institute for the Study of Labor (IZA) ( email )

Bonn
Germany

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