Remittances and the brain drain revisited: The microdata show that more educated migrants remit more

Albert Bollard, David Mckenzie, Melanie Morten, Hillel Rapoport

Research output: Contribution to journalArticlepeer-review

99 Scopus citations

Abstract

Two of the most salient trends in migration and development over the last two decades are the large rise in remittances and in the flow of skilled migrants. 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 impede remittance growth. Microdata from surveys of immigrants in 11 major destination countries are used to revisit the relationship between education and remitting behavior. The data show a mixed pattern between education and the likelihood of remitting, and a strong positive relationship between education and amount remitted (intensive margin), conditional on remitting at all (extensive margin). Combining these intensive and extensive margins yields an overall positive effect of education on the amount remitted for the pooled sample, with heterogeneous results across destinations. The microdata allow investigation of why the more educated remit more, showing that the higher income earned by migrants, rather than family characteristics, explains much of the higher remittances. remittances, migration, brain drain, education.

Original languageEnglish
Article numberlhr013
Pages (from-to)132-156
Number of pages25
JournalWorld Bank Economic Review
Volume25
Issue number1
DOIs
StatePublished - Feb 2011
Externally publishedYes

Bibliographical note

Funding Information:
Albert Bollard (abollard@stanford.edu) is a PhD student at Stanford University. David McKenzie (dmckenzie@worldbank.org; corresponding author) is a senior economist in the Finance and Private Sector Research Unit of the Development Research Group at the World Bank. Melanie Morten (morten@yale.edu) is a PhD student at Yale University. Hillel Rapoport (hillel@mail.biu.ac.il) is professor of economics at Bar Ilan University and at EQUIPPE, University of Lille and is currently a visiting research fellow at the Center for International Development at Harvard University. The authors are grateful for funding for this project from the Agence Franc¸aise de Développement (AFD). They thank all the individuals and organizations that graciously shared their surveys of immigrants, and they are grateful to Michael Clemens, participants at the 2nd Migration and Development Conference held at the World Bank in September 2009, three anonymous referees, and the journal editor for helpful comments. All opinions are those of the authors and do not necessarily represent those of AFD or the World Bank. A supplemental appendix to this article is available at http://wber.oxfordjournals.org.

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