The effect of emigration on human capital formation

This paper focuses on a possible effect of emigration on human capital formation. Emigration to a higher returns to skill country provides an incentive to invest in human capital. The level of human capital formation in the source country can therefore be positively correlated with the probability of emigration. Incidentally a surge in emigration can lead the source country out of an under-development trap. The implications of the model for the convergence controversy are also discussed.