Impact of Increased Migration Opportunity on Human Capital Accumulation of Young International Migrants: A Case of Nepal

The paper uses the recent wave of nationally represented household data to empirically test the effect of migration on two separate hypotheses: brain drain and brain gain. Both the hypothesis have been tested for skilled labor migration however, a huge gap exists for low skilled migration and its impact on human capital accumulation. The paper contributes towards adding knowledge base in existing but scarce literature on the impact of increased low skill migration opportunity and its impact on human capital accumulation. We take the number of agents present at district level as our independent variable and analyse its impact on current educational attainment of students in secondary and higher secondary level. Since completion of grade 10 is the basic requirement to be eligible to migrate to Malaysia and the Gulf, we find significant positive correlation amongst students in secondary level. An additional increase in recruiting agent in a district is likely to increases the probability of opting for grade 9 or 10 by 0.5 percentage points. Our result provides evidence of brain gain amongst secondary level students due to increased low skill migration opportunity and is statistically significant. Additionally, for the brain drain hypothesis we find that an additional increase in recruiting agent decreases the probability of opting for grade 12 and 13 by 1.9 percentage points and is statistically significant; which provides evidence of brain drain/depletion amongst higher secondary students due to increased low skill migration opportunity.