Existing migrant networks play an important role in explaining the size and structure of immigration flows. They affect the net benefits of migration for future migrants by lowering assimilation costs ('self-selection' channel) and increase the probability of potential migrants to obtain a visa through family reunification programs ('immigration policy' channel). This paper presents an identification strategy allowing to disentangle these two channels. Then, it provides an empirical illustration based on US immigration data by metropolitan area and country of origin. First, we show that the overall network externality is strong: the elasticity of migration flows to network size is around one. Second, only a quarter of this elasticity is accounted for by the policy channel. Third, the policy channel was stronger in the nineties than in the eighties due to more generous family reunion program. Fourth, the global elasticity and the policy contribution are much greater for low-skilled migrants.
Remittances have greatly increased during recent years, becoming an important and reliable source of funds for many developing countries. Therefore, there is a strong incentive for receiving countries to attract more remittances, especially through formal channels that turn to be either less expensive or less risky. One way of doing so is to increase their financial openness, but this policy option might generate additional costs in terms of macroeconomic volatility. In this paper we investigate the link between remittance receipts and financial openness. We develop a small model and statistically test for the existence of such a relationship with a sample of 66 mostly developing countries from 1980-2005. Empirically we use a dynamic generalized ordered logit model to deal with the categorical nature of the financial openness policy. We apply a two-step method akin to two stage least squares to deal with the endogeneity of remittances and potential measurement errors. We find a strong positive statistical and economic effect of remittances on financial openness.
This paper examines the relationship between the brain drain and country size, as well as the extent of small states' overall loss of human capital. We find that small states are the main losers because they i) lose a larger proportion of their skilled labor force and ii) exhibit stronger reactions to standard push factors. We also observe that the correlation between human capital indicators and country size is close to zero. This suggests that small states are more successful in producing skilled natives and less successful in retaining them.
Measuring International Skilled Migration: A New Database Controlling for Age of Entry Michel Beine, Frederic Docquier, and Hillel Rapoport Recent data on international migration of skilled workers define skilled migrants by education level without distinguishing whether they acquired their education in the home or the host country. Using these data and a simple gravity model to estimate the age-of-entry structure of the remaining 23 percent, alternative brain drain measures are proposed that exclude immigrants who arrived before ages 12, 18, and 22. the Belgian National Fund for Economic Research, professor of economics at the Universite Catholique de Louvain (Belgium), and a research fellow at the Institute for the Study of Labor (Bonn) and the Center for Research and Analysis of Migration at University College London; his email address is docquier ires.ucl.ac.be. Hillel Rapoport (corresponding author) is senior lecturer in economics at Bar-Ilan University, a member of EQUIPPE, Universites de Lille (EA CNRS 4018), and a research fellow at the Center for Research and Analysis of Migration at University College London; his email address is hillel mail.biu.ac.il. This article is part of the World Bank Migration and Development Program, which provided financial support. For permissions, please e-mail: journals.permissions oxfordjournals.org 249 250 THE WORLD BANK ECONOMIC REVIEW source country, which should consider as skilled emigrants only people who received post-secondary training in their home country. After zeros and a few suspicious observations were eliminated, 1,580 observations remained for each age threshold (1990 and 2000 included). Survey data are not available for many countries, and when they are (for example, in the EU Labor Force Survey and in the European Community Household Panel), they do not provide representative cross-sectional pictures of immigrants' characteristics. Included as origin country characteristics in Zk are i democracy indicators and measures of public expenditures on primary, secondary, and tertiary education. And included as host country characteristics in Wk f are indicators of social expenditures, education expenditures,3 and degree of openness to immigration. Bringing together the census data on age of entry, which represent 77 percent of skilled immigrants to the OECD, and the estimated structure computed using the results of the parsimonious model for the remaining 23 percent5 provides alternative measures of the brain drain from which skilled immigrants who arrived before a given age are excluded.
