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Emigration and human capital: who leaves, who comes back and what difference does it make?

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Author Info
Aitor Lacuesta () (Banco de España)
Abstract

This paper studies the loss of human capital that emigration generates in the country of origin. To that end I estimate the human capital distribution of emigrants had they not migrated. Unlike previous studies, I take into account the selection of migrants in terms of unobserved characteristics that affect their productivity. Wages in Mexico of those migrants who come back home after being abroad for some time will be crucial to learn something about the selection of non-returning migrants in terms of unobserved productivity. To test whether returning migrants' wages contain any useful information, I follow two steps. First, I use the model of Borjas and Bratsberg (1986) to show that, regardless of the cause for coming back, the distribution of abilities of non-returning migrants is more similar to the distribution of temporary migrants than to that of non-migrants. Moreover, I test some implications of the model in the data. Second, I show that returning migrants' wages reflect their pre-emigration productivity and are not affected by possible human capital gains derived from the decision to emigrate. Taking into account all this evidence, I use returning migrants' wages in Mexico upon return to estimate the distribution of human capital of non-returning migrants had they not migrated. I show that emigrants come form the middle part of the distribution of human capital in the origin country. I find evidence that taking unobserved human capital factors into account is relevant for the dispersion of the estimated distribution as well as for each of its quantiles. Moreover, it does not greatly affect the aggregate mean of human capital.

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File URL: http://www.bde.es/informes/be/docs/dt0620e.pdf
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File Function: First version, August 2006
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Publisher Info
Paper provided by Banco de España in its series Banco de España Working Papers with number 0620.

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Length: 43 pages
Date of creation: Aug 2006
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Handle: RePEc:bde:wpaper:0620

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Keywords: emigration human capital productivity

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Find related papers by JEL classification:
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
J10 - Labor and Demographic Economics - - Demographic Economics - - - General
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Luis J. Álvarez & Emmanuel Dhyne & Marco M. Hoeberichts & Claudia Kwapil & Hervé Le Bihan & Patrick Lünnemann & Roberto Sabbatini & Fernando Martins & Harald Stahl & Philip Vermeulen & Jouko Vilmun, 2005. "Sticky prices in the euro area - a summary of new micro evidence," Working Paper Series 563, European Central Bank. [Downloadable!]
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  2. S. Fabiani & M. Druant & I. Hernando & C. Kwapil & B. Landau & C. Loupias & F. Martins & T. Mathä & R. Sabbatini & H. Stahl & A. Stokman, 2005. "The pricing behaviour of firms in the euro area : new survey evidence," Research series 200511-1, National Bank of Belgium. [Downloadable!]
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  3. Arturo Galindo & Alejandro Izquierdo & José M. Montero, 2006. "Real exchange rates, dollarization and industrial employment in Latin America," Banco de España Working Papers 0601, Banco de España. [Downloadable!]
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Catia Batista & Aitor Lacuesta & Pedro C. Vicente, 2007. "Brain Drain or Brain Gain? Micro Evidence from an African Success Story," Economics Series Working Papers 343, University of Oxford, Department of Economics. [Downloadable!]
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