Bouoiyour, Jamal and Jellal, Mohamed and Wollf, François-Charles (2003): Effective Cost of Brain Drain. Published in: Brazilian Journal of Business Economics , Vol. Vol 3,, No. n° 1
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In developing countries, remittances and intra-family private transfers sent by household members who migrate to more developed countries constitute a fundamental source of income and capital accumulation. Then, it is important to understand the motives of migrants who decide to remit back to their families. Drawing on the theory of labor migration under asymmetric information, we show that low-skilled workers are expected to provide higher amounts of remittances when remittances are motivated by self-interest. This transfer paradox is explained as follows. Since low skilled workers are likely to return home when informational symmetry is restored, the optimal remittance level is a decreasing function of the migrant's skill level since remittances may be seen as an implicit insurance, whose benefits are received only under migration return.
|Item Type:||MPRA Paper|
|Original Title:||Effective Cost of Brain Drain|
|Keywords:||Remittances, asymmetric information, migration|
|Subjects:||F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J61 - Geographic Labor Mobility; Immigrant Workers
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information; Mechanism Design
|Depositing User:||jamal bouoiyour|
|Date Deposited:||01. Mar 2011 01:23|
|Last Modified:||17. Feb 2013 18:29|
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