Using data from a large-scale survey of employees in Ireland, we estimate the extent to which people who have emigrated from Ireland and returned earn more relative to comparable people who have never lived abroad. In so doing, we test the hypothesis that migration can be part of a process of human capital formation. We find through OLS estimation that returners earn 7 per cent more than comparable stayers. We test for the presence of self-selection bias in this estimate but the tests suggest that the premium is related to returner status. The premium holds for both genders, is higher for people with postgraduate degrees and for people who migrated beyond the EU to the US, Canada, Australia and New Zealand. The results show how emigration can be positive for a source country when viewed in a longer-term context.
Source: National Institute Economic Review, No 213 No 1, July 2010, pp. R43-R51. Published online 20 July 2010.