Remittances and the Brain Drain: Skilled Migrants Do Remit Less
Yoko Niimi, Caglar Ozden, Maurice Schiff
It has been argued that the brain drainís negative impact may be offset by the higher remittance levels skilled migrants send home. This paper examines whether remittances actually increase with migrantsí education level. The determinants of remittances it considers include migration levels or rates, migrantsí education level, and source countriesí 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 countriesí level and rate of migration, financial sector development and population, and decrease with these countriesí income and expected growth rate.
Text: See Discussion Paper No. 3393