Four Essays on University Economics - KOPS - Universität Konstanz
Four Essays on University Economics - KOPS - Universität Konstanz
Four Essays on University Economics - KOPS - Universität Konstanz
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Return of foreign students<br />
scholarship organizati<strong>on</strong> that provided us with the data and comment <strong>on</strong> the legal situ-<br />
ati<strong>on</strong> in Germany. The data set and our empirical strategy are described in Secti<strong>on</strong> 3.4.<br />
Subsequently, we present the results of our durati<strong>on</strong> analyses and derive implicati<strong>on</strong>s for<br />
scholarship instituti<strong>on</strong>s in Secti<strong>on</strong> 3.5. Secti<strong>on</strong> 3.6 gives a c<strong>on</strong>clusi<strong>on</strong> of the main results.<br />
3.2 Determinants of the Return Decisi<strong>on</strong><br />
When a foreign graduate decides whether to remain in the host country or to return to<br />
his or her home country he will be exposed to c<strong>on</strong>tradictory forces. He estimates costs<br />
and benefits of the alternatives – to stay, to return, or to migrate to a third country – and<br />
chooses the alternative which offers him the highest utility.<br />
3.2.1 Ec<strong>on</strong>omic and Political Determinants<br />
Previous studies which rely <strong>on</strong> aggregated data <strong>on</strong> changes in visa status find that the<br />
ec<strong>on</strong>omic and political situati<strong>on</strong> in the home and the host country have an impact <strong>on</strong><br />
students’ return decisi<strong>on</strong>s.<br />
Ec<strong>on</strong>omic Factors<br />
Potential return migrants compare employment c<strong>on</strong>diti<strong>on</strong>s – in particular wages – and<br />
employment opportunities in the home and host country. 1 The propensity to stay is high<br />
if labor demand in the host country is high and labor market c<strong>on</strong>diti<strong>on</strong>s are good (see<br />
Baruch et al., 2007; Güngör and Tansel, 2005 and 2007). Graduates who expect to find<br />
an appropriate job easily in the home country have a higher propensity to return.<br />
Furthermore, the desire to achieve higher standards of living is widely acknowledged<br />
to be a reas<strong>on</strong> for migrati<strong>on</strong>. Differences in standards of living between industrial host<br />
countries and developing or transiti<strong>on</strong> home countries are often substantial. Graduates<br />
who spent some time in the host country get used to higher standards of living and may be<br />
reluctant to return. Bratsberg (1995) reports that students from wealthier home countries<br />
have a higher propensity to return.<br />
Trade between industrial countries and developing or transiti<strong>on</strong> countries entails sub-<br />
stantial R&D spillover effects (Coe and Helpman, 1997; Kwark and Shyn, 2006). However,<br />
1 see Sjaastad (1962), Nakosteen and Zimmer (1980), Massey et al. (1993) and Borjas (1994)<br />
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