Macroeconomic Instability, Migration, and the Option Value of Education
AbstractWe explore the relation between variability in the rate of return to human capital and investment in education in the context of migration. Specifically, we show that if migration is a possibility, such variability in the rate of return to human capital can induce residents of developing countries to make greater investments in education. Moreover, providing that education is relatively costly, variability in the return to human capital may increase the average level of education in a developing economy even after expected migration is netted out. Finally, our findings are shown to have explanatory power in relation to education and migratory patterns of minorities.
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Bibliographic InfoPaper provided by Department of Economics, Bar-Ilan University in its series Working Papers with number 2001-17.
Date of creation: Oct 2001
Date of revision:
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Postal: Faculty of Social Sciences, Bar Ilan University 52900 Ramat-Gan
Phone: Phone: +972-3-5318345
Web page: http://econ.biu.ac.il
More information through EDIRC
Macroeconomic instability; Income volatility; Migration; Human capital; Ethnic discrimination; Ethnic conflicts; Minorities.;
Find related papers by JEL classification:
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, and Immigrants; Non-labor Discrimination
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
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