Capital Accumulation through Studying Abroad and Return Migration

Takumi Naito and Laixun Zhao

No DP2014-06, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: This paper characterizes the interactions among studying abroad, return migration, and capital accumulation, in a two-country overlapping generations model with households of heterogeneous ability. The model exhibits positive selection of migration status (i.e., permanent, return, and non-migrants) based on ability, and over time, return migration increases as capital accumulates. Further, a decrease in the fixed cost of studying abroad and a simultaneous offsetting increase in the fixed cost of working abroad raise the relative supply of capital in the source country without decreasing anyone’s utility. Nevertheless, any single change in either fixed cost cannot achieve it.

Keywords: Capital accumulation; Studying abroad; Return migration; Heterogeneous ability; Positive selection; Brain gain (search for similar items in EconPapers)
JEL-codes: F22 I25 O15 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2014-03, Revised 2014-03
New Economics Papers: this item is included in nep-dge and nep-mig
References: View references in EconPapers View complete reference list from CitEc
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2014-06.pdf Revised version, 2014 (application/pdf)

Related works:
Journal Article: Capital accumulation through studying abroad and return migration (2020)
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