Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/177134 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 11330
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
As more and more developed countries adopt policies that favor highly educated immigrants, the impact of such policies on developing countries remains unclear. Some researchers have argued that migrants who are more educated tend to bring their immediate family members to the host country, and thus, send less money to the source country in remittances. While there is numerous papers documenting association between education and remittance, whether that is related to sponsorship decision remains under-explored. Using individual level panel data from the New Immigrant Survey, we show that sponsoring family members leads to lower remittance. Furthermore, we show that college educated immigrants from high-income families are less likely to sponsor relatives, presumably because of relatively higher opportunity cost of migration of their relatives. Together, these two results suggest a positive association between education and remittances, which is indeed, what we find in the data. Our extended analysis shows that alternative explanations (such as higher income of more educated immigrants, or repaying implicit educational loans) cannot completely explain the positive association between education and remittances. Our results suggest that skill-based immigration policies are likely to result in more remittances.
Subjects: 
immigration
remittance
sponsorship
education
JEL: 
O15
F22
F24
J61
Document Type: 
Working Paper

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