With endogenous skills and given technology, labor market integration necessarily lowers welfare of the left-behind in a poor sending country, even if all agents face identical emigration probabilities. This is in sharp contrast to the case of exogenous skill supply.

Even though some countries track students into differing-ability schools by age 10, others keep their entire secondary-school system comprehensive. To estimate the effects of such institutional differences in the face of country heterogeneity, we employ an international...