Association for Public Policy Analysis & Management

The migration of skilled professionals, particularly of healthcare workers, is often cited as a key concern for many developing countries because of its potential to contribute to a "brain drain" and deplete the number of skilled workers from the local economy. In contrast, the recruitment abroad of skilled migrants might increase the returns to education, leading to human capital formation. We estimate the effect of skilled migration on educational investment in the country of origin by exploiting the aggressive nurse recruitment policies and subsequent visa restrictions employed by the United States in the 2000s. Using a new administrative dataset combining the universe of permanent migrant departures from the Philippines with the universe of institution-level post-secondary enrollment and graduation, we show that enrollment and graduation in nursing programs increased in response to demand from abroad for nurses. The supply of nursing programs increased to accommodate this. The increase in nursing enrollment and graduation during the period was much larger than the increase in nurse migration and contributed to a brain gain. Our results provide support for well-designed partnerships regarding healthcare workers between receiving countries, which have a shortage of healthcare workers, and sending countries, who might be able to supply these workers at low cost.