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Remittances and the Brain Drain: Skilled Migrants Do Remit Less!

Author

Listed:
  • Niimi, Yoko

    (Asian Development Bank)

  • Özden, Çağlar

    (World Bank)

  • Schiff, Maurice

    (World Bank)

Abstract

It has been argued that the adverse impact of skilled versus unskilled labor migration can be mitigated or even offset by the fact that skilled migrants remit more than unskilled ones. This paper contributes to the much debated and so far unresolved related issue of whether remittances actually increase with migrants’ level of education. The determinants of remittances considered include migration levels and 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 existing studies on this topic. Our main finding is that remittances decrease for migrants with tertiary education. This provides an additional reason for source countries to 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 in per capita income and expected growth rate.

Suggested Citation

  • Niimi, Yoko & Özden, Çağlar & Schiff, Maurice, 2008. "Remittances and the Brain Drain: Skilled Migrants Do Remit Less!," ADB Economics Working Paper Series 126, Asian Development Bank.
  • Handle: RePEc:ris:adbewp:0126
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    References listed on IDEAS

    as
    1. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
    2. Maurice Schiff & Ça?lar Özden, 2006. "International Migration, Remittances, and the Brain Drain," World Bank Publications - Books, The World Bank Group, number 6929.
    3. Nadeem U. Haque & Se-Jik Kim, 1995. "“Human Capital Flight”: Impact of Migration on Income and Growth," IMF Staff Papers, Palgrave Macmillan, vol. 42(3), pages 577-607, September.
    4. Mrs. Poonam Gupta, 2005. "Macroeconomic Determinants of Remittances: Evidence from India," IMF Working Papers 2005/224, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    financial sector development; migration levels; remittances; skilled labor; unskilled labor;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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