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Migration under Asymmetric Information and Human Capital Formation

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  • Chau, Nancy H
  • Stark, Oded

Abstract

We study the migration of skilled workers, along with the skill acquisition incentives created by the prospect of migration. We trace out the dynamics of migration as foreign employers accumulate experience in deciphering the skill levels of individual migrants. It is found that migration by the relatively highly skilled is followed by return-migration from both tails of the migrant skill distribution; that the possibility of migration induces skill acquisition at home; that until the probability of discovery reaches its steady state equilibrium, migration consists of a sequence of moves characterized by a rising average skill level; and that migration of skilled workers can entail a home-country welfare gain. Copyright 1999 by Blackwell Publishing Ltd.

Suggested Citation

  • Chau, Nancy H & Stark, Oded, 1999. "Migration under Asymmetric Information and Human Capital Formation," Review of International Economics, Wiley Blackwell, vol. 7(3), pages 455-483, August.
    • Handle: RePEc:bla:reviec:v:7:y:1999:i:3:p:455-83
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    Citations

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    Cited by:

    1. Shigemi Yabuuchi & Sarbajit Chaudhuri, 2009. "Skill Formation, Capital Adjustment Cost And Wage Inequality," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 21(1), pages 2-13, March.
    2. Chaudhuri, Sarbajit & Ghosh, Arnab & Banerjee, Dibyendu, 2018. "Can public subsidy on education necessarily improve wage inequality?," International Review of Economics & Finance, Elsevier, vol. 54(C), pages 165-177.
    3. Dequiedt, Vianney & Zenou, Yves, 2013. "International migration, imperfect information, and brain drain," Journal of Development Economics, Elsevier, vol. 102(C), pages 62-78.
    4. Saibal Kar, 2012. "Migrant Taxes and International Migration Patterns," South Asian Journal of Macroeconomics and Public Finance, , vol. 1(2), pages 231-243, December.
    5. Kar, Saibal & Saha, Bibhas, 2011. "Asymmetric Information in the Labor Market, Immigrants and Contract Menu," IZA Discussion Papers 5508, Institute of Labor Economics (IZA).
    6. Chaudhuri, Sarbajit & Bandopadhyay, Titas Kumar, 2012. "Endogenous skill formation, foreign capital and education subsidy in a dual economy," MPRA Paper 41631, University Library of Munich, Germany.
    7. Gianluca Orefice, 2014. "Offshoring, migrants and native workers: The optimal choice under asymmetric information," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(2), pages 179-201, March.
    8. Kar, Saibal & Beladi, Hamid, 2004. "Skill formation and international migration: welfare perspective of developing countries," Japan and the World Economy, Elsevier, vol. 16(1), pages 35-54, January.
    9. Mayr Karin & Peri Giovanni, 2009. "Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-52, November.
    10. Sudekum, Jens, 2002. "Subsidizing Education in the Economic Periphery: Another Pitfall of Regional Policies?," Discussion Paper Series 26130, Hamburg Institute of International Economics.
    11. Panu Poutvaara, 2003. "Educating Europe," Public Economics 0302008, University Library of Munich, Germany.
    12. Hera Susanti & Arie Damayanti, 2015. "Determinants of Internal Migration in Indonesia," Working Papers in Economics and Business 201505, Faculty of Economics and Business, University of Indonesia, revised Oct 2015.
    13. repec:got:cegedp:17 is not listed on IDEAS
    14. Khraiche, Maroula & Boudreau, James, 2020. "Can lower remittance costs improve human capital accumulation in Africa?," Journal of Policy Modeling, Elsevier, vol. 42(5), pages 1000-1021.
    15. Kar, Saibal, 2009. "International labor migration, asymmetric information and occupational choice," MPRA Paper 24106, University Library of Munich, Germany.
    16. Saibal Kar & Basudeb Guha-Khasnobis, 2006. "Foreign Capital, Skill Formation, and Migration of Skilled Workers," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 9(2), pages 107-123.
    17. Beladi, Hamid & Marjit, Sugata & Broll, Udo, 2011. "Capital mobility, skill formation and polarization," Economic Modelling, Elsevier, vol. 28(4), pages 1902-1906, July.
    18. Hamid Beladi & Saibal Kar, 2015. "Skilled and Unskilled Immigrants and Entrepreneurship in a Developed Country," Review of Development Economics, Wiley Blackwell, vol. 19(3), pages 666-682, August.
    19. Nabamita Dutta & Saibal Kar & Russell S. Sobel, 2021. "What influences entrepreneurship among skilled immigrants in the USA? Evidence from micro-data," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 56(3), pages 146-154, July.
    20. Ozan Hatipoglu & Serhan Sadikoglu, 2013. "No Brain Gain without Brain Drain? Dynamics of Return Migration and Human Capital Formation under Asymmetric Information," Working Papers 2013/09, Bogazici University, Department of Economics.

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