Capital accumulation through studying abroad and return migration

Takumi Naito, Laixun Zhao

Research output: Contribution to journalArticle

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.

Original languageEnglish
Pages (from-to)185-196
Number of pages12
JournalEconomic Modelling
Volume87
DOIs
Publication statusPublished - 2020 May

Keywords

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

ASJC Scopus subject areas

  • Economics and Econometrics

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