Conventional wisdom holds that the emigration of highly-skilled workers depletes local human capital in developing countries. But when the very prospect of emigration induces people to invest more in their education, the effects are not so negative. In this paper, Satish Chand and CGD research fellow Michael Clemens analyze a unique natural quasi-experiment in the Republic of the Fiji Islands, where political shocks have provoked one of the largest recorded exoduses of skilled workers from a developing country.
Mass emigration began unexpectedly and has occurred only in a well-defined subset of the population, creating a treatment group that foresaw likely emigration and two different quasi-control groups that did not. The authors use rich census and administrative microdata to address a range of concerns about experimental validity. This allows plausible causal attribution of post-shock changes in human capital accumulation to changes in emigration patterns.
Chand and Clemens show that high rates of emigration by tertiary-educated Fiji Islanders not only raised investment in tertiary education in Fiji; they moreover raised the stock of tertiary-educated people in Fiji—net of departures.