Studying Abroad and the Effect on International Labor Market Mobility: Evidence from the Introduction of Erasmus

41 Pages Posted: 23 May 2008

See all articles by Matthias Parey

Matthias Parey

University College London

Fabian Waldinger

University of Warwick - Department of Economics

Abstract

We investigate the effect of studying abroad on international labor market mobility later in life for university graduates. As a source of identifying variation, we exploit the introduction and expansion of the European ERASMUS student exchange program, which significantly increases a student's probability of studying abroad. Using an Instrument Variable approach we control for unobserved heterogeneity between individuals who studied abroad and those who did not. Our results indicate that student exchange mobility is an important determinant of later international labor market mobility: We find that studying abroad increases an individual's probability of working in a foreign country by about 15 to 20 percentage points, suggesting that study abroad spells are an important channel to later migration. We investigate heterogeneity in returns and find that studying abroad has a stronger effect for credit constrained students. Furthermore, we suggest mechanisms through which the effect of studying abroad may operate. Our results are robust to a number of specification checks.

Keywords: international mobility, migration, student exchange, education

JEL Classification: J61, I2, F22

Suggested Citation

Parey, Matthias and Waldinger, Fabian, Studying Abroad and the Effect on International Labor Market Mobility: Evidence from the Introduction of Erasmus. , Vol. , pp. -, . Available at SSRN: https://ssrn.com/abstract=1136235 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Matthias Parey (Contact Author)

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

Fabian Waldinger

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

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