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Out of Sight, Out of Mind: Migration, Entrepreneurship and Social Capital

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  • Jackline Wahba

    ()
    (University of Southampton)

  • Yves Zenou

    ()
    (Stockholm University, Research Institute of Industrial Economics (IFN))

Abstract

The aim of this paper is to investigate whether return migrants are more likely to become entrepreneurs than non-migrants. We develop a theoretical search model that puts forward the trade off faced by returnees since overseas migration provides an opportunity for human and physical capital accumulation but, at the same time, may lead to a loss of social capital back home. We test the predictions of the model using data from Egypt. We find that, even after controlling for the endogeneity of the temporary migration decision, an overseas returnee is more likely to become an entrepreneur than a non-migrant. Although migrants lose their original social networks whilst overseas, savings and human capital accumulation acquired abroad over-compensate for this loss.

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Bibliographic Info

Paper provided by Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London in its series CReAM Discussion Paper Series with number 0930.

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Date of creation: Nov 2009
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Handle: RePEc:crm:wpaper:0930

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Keywords: Social capital; entrepreneurship; selection; savings;

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References

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  1. Mortensen, Dale T & Pissarides, Christopher, 1999. "New Developments in Models of Search in the Labour Market," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2053, C.E.P.R. Discussion Papers.
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  3. David McKenzie & Hillel Rapoport, 2007. "Self-selection patterns in Mexico-U.S. migration: The role of migration networks," CReAM Discussion Paper Series, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London 0701, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  4. Djankov, Simeon & Qian, Yingyi & Roland, Gérard & Zhuravskaya, Ekaterina, 2006. "Who Are China's Entrepreneurs?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5706, C.E.P.R. Discussion Papers.
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Citations

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Cited by:
  1. Frederic Docquier & Hillel Rapoport, 2011. "Globalization, brain drain and development," CReAM Discussion Paper Series, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London 1108, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  2. Sylvie Démurger & Hui Xu, 2010. "Return migrants : The rise of new entrepreneurs in rural China," Post-Print, HAL halshs-00477241, HAL.
  3. Mezger Kveder, Cora Leonie & Flahaux, Marie-Laurence, 2013. "Returning to Dakar: A Mixed Methods Analysis of the Role of Migration Experience for Occupational Status," World Development, Elsevier, Elsevier, vol. 45(C), pages 223-238.
  4. Capuano, Stella & Marfouk, Abdeslam, 2013. "African brain drain and its impact on source countries: What do we know and what do we need to know?," MPRA Paper 47944, University Library of Munich, Germany.
  5. Picard, Pierre M. & Worrall, Tim, 2014. "Is a Policy of Free Movement of Workers Sustainable?," IZA Discussion Papers 8035, Institute for the Study of Labor (IZA).
  6. Giulietti, Corrado & Wahba, Jackline & Zenou, Yves, 2014. "Strong versus Weak Ties in Migration," IZA Discussion Papers 8089, Institute for the Study of Labor (IZA).

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