tailieunhanh - Financial Constraints, Endogenous Educational Choices And Self-selection Of Migrants

However, the literature on brain drain (Mountford 1997; Stark et al 1997, 1998; Vidal 1998; Beine, Docquier and Rapoport 2001, 2008) argues that workers in the home country make their educational choices taking into account the return to education in the receiving country and their migration prospects. We study the selectivity of migrants when agents make joint decisions about how much to invest in education and whether to migrate. | WORKING P A P E R Financial Constraints Endogenous Educational Choices and Self-Selection of Migrants JULIANO ASSUNCAO LEANDRO CARVALHO This product is part of the RAND Labor and Population working paper series. RAND working papers are intended to share researchers latest findings and to solicit informal peer review. They have been approved for circulation by RAND Labor and Population but have not been formally edited or peer reviewed. Unless otherwise indicated working papers can be quoted and cited without permission of the author provided the source is clearly referred to as a working paper. RAND s publications do not necessarily reflect the opinions of its research clients and sponsors. RAND is a registered trademark. WR-758 May 2010 This paper series made possible by the NIA funded RAND Center for the Study of Aging P30AG012815 and the NICHD funded RAND Population Research Center R24HD050906 . RAND LABOR AND POPULATION Financial Constraints Endogenous Educational Choices and Self-Selection of Migrants Juliano Assungão Leandro Carvalho Pontifical Catholic University of Rio de Janeiro Rand juliano@ carvalho@ March 2010 Abstract The Roy model predicts that migrants will be disproportionately drawn from the lower half of the educational distribution of the sending country if the sending country has a higher return to schooling. However Mexican immigrants in the . tend to be disproportionately drawn from the middle of the distribution. We argue that financial constraints may explain why. We study migrants selectivity when agents that face credit constraints make joint decisions about how much to invest in education and whether to migrate. Our results show that financial constraints can explain the intermediate selection of migrants observed in the data. JEL O15 O16 R23 Keywords migration financial constraints self-selection human capital 1 Introduction There is great concern in developed countries whether immigration hurts the labor market