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Human Capital Investment under Exit Options: Evidence from a Natural Quasi-Experiment

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  • Michael Clemens

    (Center for Global Development
    IZA)

  • Satish Chand

    (University of New South Wales
    ANU)

Abstract

When countries select immigrants based on skill, what happens in the migrants' countries of origin? Departing skilled workers obviously tend to reduce stocks of skill there, but the prospect of skilled migration can induce more investment in skill. It is not clear which effect dominates. This paper studies one of the fastest and relatively largest exoduses of skilled workers on record, in the Pacific country of Fiji, which paradoxically produced a net increase in the stock of skill within Fiji. It offers evidence that skilled migration prospects caused that net increase, and evidence to rule out several competing explanations.

Suggested Citation

  • Michael Clemens & Satish Chand, 2008. "Human Capital Investment under Exit Options: Evidence from a Natural Quasi-Experiment," Working Papers 152, Center for Global Development, revised Feb 2019.
    • Handle: RePEc:cgd:wpaper:152
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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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