Capital accumulation through studying abroad and return migration

Takumi Naito and Laixun Zhao

Economic Modelling, 2020, vol. 87, issue C, 185-196

Abstract: This paper examines the interplays among studying abroad, return migration and capital accumulation, in a dynamic general equilibrium model featuring heterogeneous ability. Households invest in education and make two migration decisions: whether to study abroad and subsequently whether to return home. The model predicts that the highest, middle and lowest-ability people choose respectively permanent migration, return migration and no migration. More interestingly, we find a novel migration cycle: returnees bring back learned-knowledge and over time, capital accumulates, attracting more return migration. Further, the usual “brain drain” in the literature can be turned into “brain gain”, by providing a subsidy to studying abroad and returning home.

Keywords: Capital accumulation; Studying abroad; Return migration; Heterogeneous ability; Brain gain (search for similar items in EconPapers)
JEL-codes: F22 I25 O15 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Capital Accumulation through Studying Abroad and Return Migration (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:87:y:2020:i:c:p:185-196

DOI: 10.1016/j.econmod.2019.07.018

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