Emigration Network, Reverse Migration, and Economic Development

This project aims to explore the role of international migration networks in promoting trade and home country development. It endogenizes the process of reverse migration and analyzes the short-run and long-run impacts of migration on income distribution, industrial structure, incentives of education investment, and growth in the home country.The project develops a general-equilibrium model in which the home country may transit from a mainly agrarian economy to an industrialized one if the emigration networks sufficiently help home enterprises expand their foreign market access. As the development in the home country kicks off, talented emigrants may return to start new businesses, resulting in reverse migration. By bringing remittances, new managerial skills and outlooks, and social capital back to the home country, such reverse migration can result in brain gain in the long run. Depending on the country-specific characteristics, a weak migration network formed by emigrants with intermediate talent may also emerge in equilibrium. It is hypothesized that brain drain is likely to occur in this case since a weak migration network helps little to expand the scope of foreign market access and minimizes the incentive of talented migrants to return. As a result, the home country's development is retarded in the process of migration.