Date & time
The emigration of lower-skilled workers is generally accepted as beneficial for the development of migrant-sending countries. However, it can also lead to a disincentive effect on human capital formation of the source country. Using a new panel dataset that captures the sharp upsurge of lower-skilled migrants in OECD countries in the 2000s, we find that the prospects of lower-skilled emigration encourage potential migrants to complete secondary schooling but discourage them from pursuing tertiary education, thus retarding long-run human capital formation of the source country. Furthermore, in contrast with middle- and high-income countries, poor countries show little disincentive effect of the prospects of lower-skilled emigration on human capital formation. This finding provides a strong support for incorporating lower-skilled emigration into the studies of brain drain/gain.