International Migration

International migration can reshape origin societies in a range of other dimensions, many of which also lead to ‘brain gain’ in the origin. This section reviews evidence of impacts on business development, foreign direct investment, and trade; innovation and knowledge transfer; and the transmission of social and political norms.

Business Development, Foreign Direct Investment, and Trade

Emigrants contribute to economic development in their origin countries by facilitating business connections, capital flows, and trade relationships. Migrant networks serve as bridges between origin and destination economies, reducing information asymmetries and transaction costs that would otherwise limit cross-border economic activity. The importance of these network connections is well-established: Munshi (2003) demonstrates that Mexican migrants with larger village-of-origin networks in the US are significantly more likely to find employment, highlighting how social connections facilitate economic integration and information transmission across borders. Beaman (2012) similarly shows labour market benefits for refugees resettled in locations with a larger community from their origin country. Beine et al. (2015) suggest that networks lower assimilation costs for future migrants and increase the probability of obtaining visas through family reunification programmes.

Recent evidence using credible research designs demonstrates that migrant networks significantly increase foreign direct investment flows to origin countries. Buchardi et al. (2019) exploit historical variation in migrant settlement patterns across US counties to show that areas with larger migrant networks send substantially more foreign direct investment to migrants’ origin countries. Mayda et al. (2022) exploit quasi-experimental variation in US refugee resettlement locations and show that a 10% increase in the number of refugees from a given origin country increases FDI flows to that country by approximately 2%, suggesting that even forced migrants can serve as important bridges facilitating cross-border investment. Cross-country analysis reinforces these findings, revealing strong associations between the stock of tertiary-educated migrants and foreign direct investment flows to migrant origin countries (Javorcik et al. 2011).

Manufacturing sector evidence provides additional support for the business development channel. Kerr (2008) employs a difference-in-differences strategy exploiting an immigration reform that affected the presence in the US of high-skilled scientists and engineers from different origin countries. The study finds that a 10% increase in the migrant ethnic network increases manufacturing output in the origin country by 3%, operating through enhanced technology transfer and business connections between co-ethnic entrepreneurs.

Trade facilitation represents another important mechanism through which migration networks benefit origin economies. Migrants reduce trade costs by providing market intelligence, facilitating connections between importers and exporters, and helping firms navigate foreign regulatory environments. Natural experiments derived from Vietnamese refugee resettlement in the US (Parsons and Vézina 2018) and Japanese ethnic networks formed during World War II imprisonments (Cohen et al. 2017) provide compelling causal evidence that migrants facilitate trade with their origin countries. Both studies document substantial effects on bilateral trade flows. The Vietnamese refugee study finds larger effects for more skilled migrants and in more skill-intensive sectors.

The trade effects appear to be bidirectional, benefiting both origin and destination countries through expanded export opportunities and access to lower-cost imports. Having a more skilled diaspora generates larger trade impacts (Bahar and Rapoport 2018), consistent with the hypothesis that educated migrants are better able to identify profitable trading opportunities and navigate the complexities of international commerce.

However, the business development effects of migration are not universally positive. Evidence from Italy using shift-share instrumental variables shows that recession-induced emigration of young, skilled workers can reduce new firm creation in migrant-origin areas (Anelli et al. 2023). This suggests that in the short run, particularly during economic downturns, the direct loss of entrepreneurial human capital can outweigh the potential benefits from diaspora networks.

Similarly, staggered difference-in-differences analysis of Eastern European EU accession reveals short-term negative effects on origin-country productivity as skilled workers emigrate. Giesing and Laurentsyeva (2017) find that tertiary-educated worker emigration initially increases labour costs and reduces productivity in migrant-origin economies. Importantly, however, these negative effects dissipate over time as firms adjust their production technologies and business practices, highlighting the importance of distinguishing between short-run disruption and long-run adaptation.

The type of migrant also matters for business development impacts. Survey evidence from academic high achievers across Pacific countries reveals that it is uncommon for academics and scientists to directly facilitate business development through trade deals, knowledge transfers to firms, or venture capital provision (Gibson and McKenzie 2012). By contrast, migrant information technology workers from countries like India, China, Israel, and Taiwan have played crucial roles in providing venture capital, technical knowledge, and network connections that helped establish and grow technology industries in their home countries (Saxenian 2007).

Innovation and Knowledge Transfer

High-skilled emigrants can facilitate innovation and scientific progress in their origin countries. They can also serve as conduits for knowledge transfer from technologically advanced destination countries back to their origins. Fackler et al. (2020) use policy variation in Europe to provide credible identification, finding that increases in high-skilled immigration due to changes in European labour mobility laws lead to increases in patent applications in migrants’ origin countries.

Knowledge transfer often happens alongside return migration. When Chinese provinces provide incentives to attract overseas returnees, local companies that hire directors with foreign experience see improved management practices and higher firm valuations and profits (Giannetti et al. 2015). Bahar et al. (2024) exploit the natural experiment of Yugoslavian refugees returning from Germany after the 1990s wars, and show that origin-country industries with 10% more returning refugees exhibited 1–1.6% higher exports. Effects were driven primarily by refugees in knowledge-intensive occupations who had worked at high-paying German firms. Similarly, employees of multinational corporations in India who are assigned to returnee managers file significantly more US patents, suggesting that returned migrants transfer valuable innovation capabilities to their domestic colleagues (Choudhury 2016). These studies demonstrate how temporary migration can generate lasting productivity improvements in origin places through the international transfer of industrial knowledge.

Studies have also documented positive knowledge transfer effects stemming from return migration of research scholars or academics. The Fulbright Fellowship programme, which requires fellows to return to their home countries, generates substantial research impacts: returning fellows are cited 90% more than comparable control groups (Kahn and MacGarvie 2016). Studies of top academic achievers from Pacific countries show that while return migrants may not have greater direct research impact than similar non-migrants, they serve as the primary source of cross-border research knowledge transfers (Gibson and McKenzie 2014b). Return migration of US-trained African scientists increases their non-migrant colleagues’ publication output by 12% through improved access to international knowledge and research connections (Fry 2023). Even without return migration, more exposure to diaspora scientists leads to a greater likelihood of collaboration between non-mobile scientists and foreigners (Ito et al. 2025).

Conversely, losing potential innovators through emigration can inhibit economic growth and innovation in origin countries. This creates a fundamental tension: migration openness can provide access to global knowledge networks that drive local innovation, but it may also reduce the number of innovators working domestically (Prato 2025). The net effect depends on whether the knowledge inflows from diaspora networks can compensate for the direct loss of innovative human capital (Agrawal et al. 2011).

Firm responses to changes in human capital availability further complicate the innovation impacts of migration. When migration increases the supply of skilled workers — either through brain gain effects or return migration — firms may respond by investing in skill-complementary technologies that enhance productivity. Conversely, when skilled emigration reduces domestic human capital, firms may substitute towards labour-saving technologies or reduce their innovation efforts entirely. Coluccia and Spadavecchia (2024) study the impacts of US immigration restrictions in the 1920s on Italian migrant origin areas, finding that the resulting increase in low-skilled labour supply discouraged Italian firms from investing in productivity-enhancing technologies, as firms substituted towards the more abundant factor of production.

Social and Political Norm Transmission

Migration can transmit social and political norms between destination and origin countries, potentially reshaping institutions, governance quality, and social practices in migrant-origin areas. This norm transmission occurs through multiple channels: migrants may transfer values and practices acquired abroad when they return home, diaspora communities may use their resources and connections to promote social and political change, and remittances may alter power dynamics within households and communities.

Experimental evidence finds that migration shapes political attitudes among migrants themselves. Gaikwad et al. (2024) conducted an RCT facilitating international migration, connecting individuals in India with job opportunities in the Persian Gulf region’s hospitality sector. Two years after the programme began, individuals in the treatment group were significantly more accepting of ethnic, cultural, and national out-groups. Migration also bolstered support for international cooperation and cultivated cosmopolitan identities, demonstrating that the experience of migration can foster tolerance and reduce anti-globalisation attitudes among migrants themselves.

Evidence from a post-Communist country provides particularly compelling insights into how migration can facilitate democratic transitions. Barsbai et al. (2017) examine the remarkable case of Moldova, where the emigration wave following the 1998 Russian financial crisis contributed to the eventual fall of Europe’s last Communist government. They exploit the quasi-experimental variation arising from the fact that Moldovan emigrants moved to destinations with different levels of democratic development, both to more democratic Western European countries and to less democratic Russia. Areas with higher emigration rates to Western Europe experienced significant shifts in electoral outcomes and political preferences during the following decade. Crucially, the direction of emigration mattered: migration to more democratic destinations promoted democratic values in origin communities, while migration to less democratic destinations did not generate these effects. Emigrants serve as conduits for cultural diffusion, bringing back democratic norms acquired in destination countries. The political norm transmission effects of migration depend critically on the institutional characteristics of destination countries, with migrants serving as vectors for democratisation when they move to more-democratic societies.

Other studies have found similar results, underscoring that international migration can promote democratic political norms and have other positive effects on political behaviour and institutions in migrants’ origin societies (Chauvet and Mercier 2014, Docquier et al. 2016, Mercier 2016, Batista et al. 2019). Relatedly, cross-country evidence suggests that international education in high-quality democracies can improve governance in origin countries. Spilimbergo (2009) finds that sending students to study in established democracies is associated with subsequent improvements in the quality of democratic institutions in their home countries. This effect appears to operate through the transmission of democratic values that students acquire abroad.

Micro-level evidence from Cape Verde demonstrates how diaspora engagement can enhance demand for better governance. Areas with more emigrants — particularly educated emigrants to the US — display greater demand for improved public services (Batista and Vicente 2011). This suggests that exposure to higher-quality institutions abroad can raise expectations for governance quality at home, creating political pressure for institutional improvements.

Experimental evidence provides additional support for norms transmission. A randomised intervention to improve the integration of Cape Verdean immigrants in Portugal generated spillover effects on their closest contacts in Cape Verde, who increased electoral participation by 11 percentage points and support for gender equity in household decision-making by 4%, relative to contacts of migrants not offered the intervention (Batista et al. 2024). This demonstrates that improvements in migrant experiences abroad can transmit back to origin communities through network effects.

Gender norm transmission represents another important channel through which migration can affect origin-country social outcomes. Evidence from the Bangladesh-Malaysia visa lottery shows dramatic improvements in female decision-making power within families of successful lottery applicants. Lottery winners’ wives were 148% more likely to be identified as household heads, and there was a 75% increase in females holding exclusive decision-making authority in those families (Mobarak et al. 2023). These changes in gender norms can produce downstream benefits for child health and development, as female empowerment is associated with improved investments in children’s education and welfare.

Migration can also generate significant changes in reproductive health norms in origin communities. A large literature in demography, economics, and sociology shows that migrants and their origin households modify fertility in response to migration. Studies have found that migration to countries with differing fertility rates are associated with fertility decisions in origin countries (Beine et al. 2013, Fargues 2011). Godlonton and Theoharides (2025) examine the effect of exposure to reproductive health policies in destination countries on fertility decisions in migrant-origin communities in the Philippines. They exploit changes in reproductive health policies in destination countries combined with spatial variation in the historical destination composition and intensity of migration across the Philippines. Migrants’ exposure to more liberalised reproductive health policies abroad leads to lower fertility rates in their origin communities in the Philippines, achieved through the adoption of modern family planning technologies. Notably, they find that both infant and maternal mortality decline in response to exposure to more liberalised reproductive health policies, consistent with existing literature that reduced fertility can result in lower mortality proximate to birth. Similar to the literature on political norms, the fertility effects that they find are moderated depending on the established family planning values in the country of destination. Broadly, their results suggest another non-pecuniary benefit of migration on origin communities.

The nature of norm transmission via migrants depends on the characteristics of destination countries. When migrants move to more conservative societies, they may return with less progressive values. Evidence from Jordan shows that migrants returning from conservative Arab countries bring back more traditional gender norms compared to those returning from more liberal destinations (Tuccio and Wahba 2018). Similarly, the fertility and contraceptive adoption responses to liberalised reproductive health policy in Godlonton and Theoharides (2025) differ substantially depending on whether the destination country has a larger Catholic population, where norms surrounding modern family planning methods may differ from destination countries with smaller Catholic populations.

For full reference list see the end of the conclusion chapter.