Temporary migration provides an opportunity for workers to acquire physical capital, to accumulate savings and assets and most importantly to acquire new skills and knowledge. Upon return to their home country, migrants represent an inflow of both human capital and financial capital. The return of migrants can be a potential source of economic growth for the origin country through increased productivity and knowledge diffusion.
The authors study the extent to which temporary overseas migration enables returnees to climb theoccupational ladder. Using data from Egypt, they examine the occupational mobility of returnees relative to non-migrants for the same labour 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.
This report finds 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. 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.