Education, Remittances, and Return Migration

Open Access
Author:
Tsai, Erlfang
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • James Tybout, Thesis Supervisor
  • Russell Chuderewicz, Honors Advisor
Keywords:
  • human capital
  • education
  • remittances
  • return migration
  • development
  • migration
Abstract:
The neoclassical “brain drain” hypothesis contended higher returns to skill in the developed world would lead to skilled emigration from the developing world, depleting the poorest countries of their skilled individuals and “trapping” them at low levels of human capital. However, descriptive and qualitative evidence suggest skilled emigration also has the potential to generate “brain gains” for developing countries by directly increasing or indirectly promoting human capital investment in the sending country. Does the likelihood of brain gains depend on migrants’ skill level? Drawing on cross-sectional data from the World Bank’s Migration and Remittances Surveys, I consider the relationship between migrant educational attainment and two specific channels of brain gain: remittances and return migration. I build on empirical work by Collier, Piracha, and Randazzo (2011) and others, using a probit model to estimate the effect of migrants’ education on their propensity to remit and further analyzing the characteristics of return migrants. I find no systematic impact of migrant education on propensity to remit and significant heterogeneity among return migrants by sending country, demonstrating the context-dependent nature of brain gains and the challenges of linking migration to human capital accumulation and development.