On‐The‐Job Skills and Earnings of Returned Migrants

In this paper we study the factors altering the probability of migrants to acquire additional on‐the‐job skills while abroad, and the determinants of their earnings level, using a sample of 6120 returned migrants from Bosnia, Bulgaria, Georgia, Kyrgyz Republic, Romania, and Tadjikistan. We use a two‐stage procedure to estimate a system of two equations where on‐the‐job skills and earnings are determined simultaneously. The probability of acquiring skills on‐the‐job is found to be positively affected by the level of earnings. It is also higher for migrants who are employed in the same sector (pre‐ and during migration), and for migrants with lower initial financial status. Interestingly, the probability is lower for migrants with university education. The earnings level is positively affected by acquired on‐the‐job skills, the level of education, and the duration of migration. Women have lower earnings while those (males and females) who have learned the language of the destination country have higher earnings. The country variables are statistically significant in all cases but one, indicating that there are differences in the acquisition of skills and earnings reflecting unspecified differences among the countries of origin.