Time spent abroad as a source of human capital – A nationwide study

Abstract

This study examined the extent to which time spent abroad contributes to human capital, using higher income as an indicator. Utilising Finnish register data, the study focused on returning migrants with higher education (N = 3497), matched with a reference population (N = 30,882). Time abroad was associated with a higher income level upon return amongst men (returnees €63,199, reference €55,982), but not amongst women (returnees €39,316, reference €41,779). In sectors, such as industry, construction, sales and finance, returnees showed particularly significant income differences compared to the reference group. However, even in these sectors, the association between international experience and subsequent income levels appeared to be notably stronger amongst men than women. In these sectors, men's income grew more, with increases of €8678 to €19,363 annually, while women's gains were €1685 to €9582. Overall, while time abroad enhances human capital, the benefits vary substantially by gender and sector. Men experienced clearer income growth compared to their counterparts in the reference group, whereas for women, no similar accumulation of human capital was identified.