Upward or downward: Occupational mobility and return migration

Abstract

• We provide evidence from Egypt showing that return migrants experience higher occupational mobility relative to non-migrants. • We find that among the returnees, the highly educated have an even higher probability of climbing the occupational ladder. • The longer the migration duration, the larger the positive effect of return migration on occupational upgrading. • The human capital accumulation of return migrants appears to drive the results. This paper examines whether temporary international migration enables returnees to climb the occupational ladder. Using data from Egypt, we examine the occupational mobility of returnees relative to non-migrants of the same birth cohort. We rely on an instrumental variable approach to control for the endogeneity of the temporary migration decision. We find evidence that return migration increases the probability of upward occupational mobility and leads to larger effects among highly educated returnees. Our results are robust to using a Difference-in-Differences matching technique that controls for unobserved heterogeneity between non-migrants and returnees. Our findings underscore that temporary overseas work experience can alleviate potential brain drain concerns through the human capital enhancement of return migrants.