Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/196671 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12173
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Theory suggests that groups historically subject to discrimination, such as Jews, could exhibit traditionally high investment in education because discrimination spurred exit facilitated by human capital. Theory moreover suggests that if exit is uncertain, it could induce investment in skill that more-than-offsets the mechanical reduction in skill stocks at the origin. Tests of such theories are difficult and few. We examine a unique natural quasiexperiment in the Republic of Fiji, in which a sharp increase in discrimination induced mass exit by one ethnic group and mass skill investment by the same group. We show that the induced investment more than offset the loss from exit, producing a net increase in skill stocks. We argue with theory and a range of nonexperimental falsification tests that exit by skilled workers was a necessary causal mechanism of the offsetting skill investment.
Subjects: 
brain drain
migration
immigration
emigration
skill
student
tertiary
postsecondary
college
university
training
human capital
education
Jewish
Asian
ethnic
discrimination
schooling
selection
commonwealth
Australia
New Zealand
Canada
Pacific
brain gain
natural experiment
Fiji
JEL: 
F22
J24
O15
Document Type: 
Working Paper

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