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Capital accumulation through studying abroad and return migration

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  • Naito, Takumi
  • Zhao, Laixun

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.

Suggested Citation

  • Naito, Takumi & Zhao, Laixun, 2020. "Capital accumulation through studying abroad and return migration," Economic Modelling, Elsevier, vol. 87(C), pages 185-196.
  • Handle: RePEc:eee:ecmode:v:87:y:2020:i:c:p:185-196
    DOI: 10.1016/j.econmod.2019.07.018
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    More about this item

    Keywords

    Capital accumulation; Studying abroad; Return migration; Heterogeneous ability; Brain gain;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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