[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/5720.html
   My bibliography  Save this paper

Remittances and the Brain Drain

Author

Listed:
  • Faini, Riccardo
Abstract
In most destination countries, immigration policies are increasingly tilted toward the most skilled individuals. Whether this shift hurts economic prospects in sending countries, as argued by the traditional brain drain literature, is somewhat controversial. The most recent literature has focused on the link between skilled out-migration and educational achievements. In this paper, we emphasize a different channel. It is often argued that skilled migrants raise economic welfare at home thanks to a relatively larger flow of remittances. Skilled migrants typically earn relatively more and, ceteris paribus, will therefore remit more. However, they are also likely to spend a longer span of time abroad and also are more likely to reunite with their close family in the host country. Both factors should be associated with a relatively smaller flow of remittances from skilled migrants. Hence, the sign of the impact of the brain drain on total remittances is an empirical question. We first develop a simple model showing that skilled migrants may have indeed a lower propensity to remit home out of a given flow of earnings abroad. We then derive an empirical equation of remittances and estimate it on a large panel of developing countries. As a measure of the brain drain, we use the dataset by Docquier and Marfouk (2004) that in turn builds on the pioneering work of Carrington and Detragiache (2004). We find considerable evidence that the brain drain is associated with a smaller flow of remittances.

Suggested Citation

  • Faini, Riccardo, 2006. "Remittances and the Brain Drain," CEPR Discussion Papers 5720, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:5720
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP5720
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A brain gain with a brain drain," Economics Letters, Elsevier, vol. 55(2), pages 227-234, August.
    2. Adams, Richard H, Jr, 1991. "The Economic Uses and Impact of International Remittances in Rural Egypt," Economic Development and Cultural Change, University of Chicago Press, vol. 39(4), pages 695-722, July.
    3. Stark, Oded & Lucas, Robert E B, 1988. "Migration, Remittances, and the Family," Economic Development and Cultural Change, University of Chicago Press, vol. 36(3), pages 465-481, April.
    4. Solimano, Andrés, 2002. "Globalizing talent and human capital: implications for developing countries," Macroeconomía del Desarrollo 5376, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    5. Raghuram G. Rajan & Arvind Subramanian, 2005. "What Undermines Aid's Impact on Growth?," NBER Working Papers 11657, National Bureau of Economic Research, Inc.
    6. 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.
    7. Adams, Richard H, Jr, 1998. "Remittances, Investment, and Rural Asset Accumulation in Pakistan," Economic Development and Cultural Change, University of Chicago Press, vol. 47(1), pages 155-173, October.
    8. Robert J. Barro & Paul Romer, 1993. "Economic Growth (1992)," NBER Books, National Bureau of Economic Research, Inc, number barr93-1.
    9. Oded Stark, 2005. "The New Economics of the Brain Drain," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 6(2), pages 137-140, April.
    10. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    11. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-918, October.
    12. Raghuram G. Rajan & Arvind Subramanian, 2008. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 643-665, November.
    13. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
    14. Lipton, Michael, 1980. "Migration from rural areas of poor countries: The impact on rural productivity and income distribution," World Development, Elsevier, vol. 8(1), pages 1-24, January.
    15. Peter Downes & Aaron Drew & Patrice Ollivaud, 2003. "The OECD Medium-Term Reference Scenario: Economic Outlook No.74," OECD Economics Department Working Papers 372, OECD Publishing.
    16. Bhagwati, Jagdish & Hamada, Koichi, 1974. "The brain drain, international integration of markets for professionals and unemployment : A theoretical analysis," Journal of Development Economics, Elsevier, vol. 1(1), pages 19-42, April.
    17. Johnson, George E & Whitelaw, W E, 1974. "Urban-Rural Income Transfers in Kenya: An Estimated-Remittances Function," Economic Development and Cultural Change, University of Chicago Press, vol. 22(3), pages 473-479, April.
    18. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human capital depletion, human capital formation, and migration: a blessing or a "curse"?," Economics Letters, Elsevier, vol. 60(3), pages 363-367, September.
    19. Michel Beine & Frédéric Docquier & Hillel Rapoport, 2002. "Brain Drain and LDCs' Growth: Winners and Losers," Working Papers 2002-08, Bar-Ilan University, Department of Economics.
    20. William Easterly, 2003. "Can Foreign Aid Buy Growth?," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 23-48, Summer.
    21. William Easterly & Ross Levine & David Roodman, 2003. "New Data, New Doubts: Revisiting "Aid, Policies, and Growth"," Working Papers 26, Center for Global Development.
    22. Burnside, Craig & Dollar, David, 2004. "Aid, policies, and growth : revisiting the evidence," Policy Research Working Paper Series 3251, The World Bank.
    23. Mr. William Carrington & Ms. Enrica Detragiache, 1998. "How Big is the Brain Drain?," IMF Working Papers 1998/102, International Monetary Fund.
    24. Edgard R. Rodriguez & Susan Horton, 1995. "International Return Migration and Remittances in the Philippines," Working Papers horton-95-01, University of Toronto, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elisabetta Lodigiani, 2009. "Diaspora Externalities as a Cornerstone of the New Brain Drain Literature," DEM Discussion Paper Series 09-03, Department of Economics at the University of Luxembourg.
    2. Riccardo Faini, 2003. "Is the Brain Drain an Unmitigated Blessing?," WIDER Working Paper Series DP2003-64, World Institute for Development Economic Research (UNU-WIDER).
    3. Simona Monteleone & Benedetto Torrisi, 2010. "A micro data analysis of Italy’s brain drain," Discussion Papers 4_2010, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    4. Kangasniemi, Mari & Winters, L. Alan & Commander, Simon, 2007. "Is the medical brain drain beneficial? Evidence from overseas doctors in the UK," Social Science & Medicine, Elsevier, vol. 65(5), pages 915-923, September.
    5. Ravi Kanbur & Hillel Rapoport, 2005. "Migration selectivity and the evolution of spatial inequality," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 43-57, January.
    6. Chaitali Sinha, 2017. "International Migration and Welfare Implications," South Asian Journal of Macroeconomics and Public Finance, , vol. 6(2), pages 209-229, December.
    7. Docquier, Frederic & Rapoport, Hillel, 2004. "Skilled migration: the perspective of developing countries," Policy Research Working Paper Series 3382, The World Bank.
    8. Simona Monteleone, 2009. "Brain drain e crescita economica: Una rassegna critica sugli effetti prodotti," Working Papers 2_2009, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    9. Docquier, Frédéric, 2006. "Brain Drain and Inequality Across Nations," IZA Discussion Papers 2440, Institute of Labor Economics (IZA).
    10. Docquier,Frederic & Marfouk,Abdeslam, 2004. "Measuring the international mobility of skilled workers (1990-2000) : release 1.0," Policy Research Working Paper Series 3381, The World Bank.
    11. Luca Marchiori & Patrice Pieretti & Benteng Zo, 2008. "Brain Drain, Remittances, and Fertility," Economie Internationale, CEPII research center, issue 115, pages 9-42.
    12. Commander, Simon & Kangasniemi, Mari & Winters, L. Alan, 2003. "The Brain Drain: Curse or Boon?," IZA Discussion Papers 809, Institute of Labor Economics (IZA).
    13. José Luis Groizard & Joan Llull, 2006. "Skilled migration and growth. Testing brain drain and brain gain theories," DEA Working Papers 20, Universitat de les Illes Balears, Departament d'Economía Aplicada.
    14. Monteleone, Simona & Torrisi, Benedetto, 2010. "A Micro Data Analisys Of Italy’s Brain Drain," MPRA Paper 20995, University Library of Munich, Germany.
    15. Jean-Christophe Dumont & Georges Lemaître, 2005. "Beyond the Headlines. New Evidence on the Brain Drain," Revue économique, Presses de Sciences-Po, vol. 56(6), pages 1275-1299.
    16. Di Maria, Corrado & Lazarova, Emiliya A., 2012. "Migration, Human Capital Formation, and Growth: An Empirical Investigation," World Development, Elsevier, vol. 40(5), pages 938-955.
    17. Frédéric Docquier & Elisabetta Lodigiani, 2010. "Skilled Migration and Business Networks," Open Economies Review, Springer, vol. 21(4), pages 565-588, September.
    18. Maurice Kugler & Hillel Rapoport, 2005. "Skilled Emigration, Business Networks and Foreign Direct Investment," CESifo Working Paper Series 1455, CESifo.
    19. Jawad, Muhammad & Qayyum, Abdul, 2015. "Modelling the Impact of Policy Environment on Inflows of Worker’s Remittances in Pakistan: A Multivariate Analysis," MPRA Paper 85497, University Library of Munich, Germany.
    20. Blaise Gnimassoun & John C. Anyanwu, 2019. "The Diaspora and economic development in Africa," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(4), pages 785-817, November.

    More about this item

    Keywords

    Remittances; Migration; Brain drain;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:5720. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.