Negative-Selection Migration, Human Capital Accumulation and Development Trap

Abstract

This paper theoretically examines the effect of labor migration on education investment and human capital accumulation in migrant-sending countries in a negative-selection circumstance. Negative-selection migration has two conflicting effects: parents' migration brings remittances and facilitates education investment while individuals in prospect of future migration lose education incentives. The results show that migration encourages education investment when school quality is high, but that migration discourages it and creates a development trap otherwise. This paper also examines a case where the migration destination employs an education-based immigration restriction. The trap remains unless the restriction is drastically severe.