Do Employers Value Return Migrants? An Experiment on the Returns to Foreign Work Experience
Working Paper 48
Publisher: Washington, DC: Mathematica Policy Research
Return migrants who have worked abroad are a potentially important source of human capital for employers in migrant-sending countries. Yet, to date, the value of the foreign work experience that they bring to the local labor market remains poorly understood. What is the demand for return migrants among employers in a country where almost 11 percent of its workers leave for abroad? I conduct an audit study in the Philippines, sending over 8,000 fictitious resumes in response to online job postings across multiple occupations. Resumes were randomly assigned varying lengths of foreign work experience, among other things. Employers appear to disfavor return migrants: Workers with foreign experience receive 12 percent fewer callbacks than non-migrants, with callback rates even lower for those who spent a longer time abroad. I test possible explanations and find that, consistent with employer interviews, location-specific human capital is important to employers, and the value of this human capital deteriorates as a worker spends time away from the domestic economy.
- Employers do not appear to value work experience abroad: Job applications with foreign work experience receive 12 percent fewer callbacks than otherwise identical job applications.
- The callback rate appears to decrease for workers who spend a longer time abroad than in the home country.
- Suggestive evidence indicates that the depreciation of location-specific human capital appears to be the most plausible explanation. Employers value workers who have experience in local production processes. But the value of this location-specific human capital deteriorates as workers spend time away from the local economy.