New Skills, New Jobs: Return Migration, Skill Transfers, and Business Formation in Mexico

Numerous studies have documented a high propensity for self-employment and business formation among return migrants relative to non-migrants. The literature points to the importance of remitted savings, migration duration, and number and types of jobs abroad for business formation upon return. Implicit in this scholarship is the assumption that migrants acquire not only financial capital, but also human capital, which expands their opportunities upon return. Empirical work has demonstrated how the transfer of formal human capital, such as language skills and professional credentials, influences the mobility pathways of professional return migrants. More recent research has also found that the transfer of informal human capital, such as social and technical skills learned on the job, shape the mobility pathways of return migrants with little schooling. Absent from this scholarship, however, are studies that directly test the relationship between the transfer of informal human capital and the odds of business formation among return migrants. In this paper, we address this gap. Using a multidimensional skills variable, which includes social, technical, and English language competences, we measure and test the relationship between skill acquisition and transfer and business formation among return migrants. Drawing on findings from a survey of 200 return migrants and 200 non-migrants in Mexico, we show that return migrants who successfully acquire and transfer new skills across the migratory circuit often leverage their new knowledge to launch businesses. Our findings have wide implications for how social scientists conceptualize and measure human capital formation across the migratory circuit.