Upward or Downward: Occupational Mobility and Return Migration

We study the extent to which temporary overseas migration enables returnees to climb the occupational ladder. Using data from Egypt, we examine the occupational mobility of returnees relative to non-migrants for the same labor market entrants’ cohort. We rely on instrumental variable approach but also employ a Difference-in-Differences, as well as Difference-in-Differences matching techniques to control for the endogeneity and selection into migration. We find evidence that return migration increases the probability of upward occupational mobility. However, the results suggest that only highly educated returnees climb the occupational ladder after return. Our findings underscore the role played by temporary overseas work experience in dampening potential brain drain concerns through the human capital enhancement of high educated return migrants.