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Does Migration Encourage Human Capital Formation in Labor-Sending Country?

Author

Listed:
  • Shimada, Akira

    (Nagasaki University)

Abstract

This study investigates the effects of migration possibilities on the demand for education and human capital formation in the labour-sending country. The paper assumes that workers have to pay a pecuniary cost privately to receive education under budget constraints. It was found that higher migration possibilities result in an increase in the number of workers who demand education due to increases in its return. However, these workers lower the individual demand for education due to price increases. When the education supply is insufficient, higher migration possibilities may lower average human capital; that is, a brain drain may occur. This contrasts with the usual argument that emphasises the positive effect of migration possibilities. Restrictive immigration policies were found not to be completely detrimental to labour-sending countries since such policies may enhance the human capital formation.

Suggested Citation

  • Shimada, Akira, 2013. "Does Migration Encourage Human Capital Formation in Labor-Sending Country?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 28, pages 632-649.
    • Handle: RePEc:ris:integr:0617
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    More about this item

    Keywords

    Migration; Heterogeneous Workers; Education Market; Human Capital Formation; Brain Drain; Brain Gain;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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