TY - JOUR
T1 - Capital accumulation through studying abroad and return migration
AU - Naito, Takumi
AU - Zhao, Laixun
N1 - Funding Information:
We are grateful to the editor Sushanta Mallick and an anonymous reviewer for their helpful comments. We also appreciate JSPS (#16K03671 (Naito), #24330079 (Zhao)) for financial support. All remaining errors are ours.
Publisher Copyright:
© 2019 Elsevier B.V.
PY - 2020/5
Y1 - 2020/5
N2 - 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.
AB - 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.
KW - Brain gain
KW - Capital accumulation
KW - Heterogeneous ability
KW - Return migration
KW - Studying abroad
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U2 - 10.1016/j.econmod.2019.07.018
DO - 10.1016/j.econmod.2019.07.018
M3 - Article
AN - SCOPUS:85069662661
SN - 0264-9993
VL - 87
SP - 185
EP - 196
JO - Economic Modelling
JF - Economic Modelling
ER -