Description

Using data from 76 developing countries, this paper analyzes how such variables as the skill composition of migrants, poverty, and interest and exchange rates affect the level of international remittances received by different developing countries. Controlling for endogeneity using instrumental variables, it finds that countries which export a larger share of high-skilled (educated) migrants receive less per capita remittances.  It also finds that the level of poverty in a labor-sending country does not have a positive impact on the level of remittances received by a country.  However, countries which maintain higher (real) interest rates tend to receive more remittances.