The development impacts of emigration are largely determined by the education of those who stay
behind. Departure of workers leads to a direct loss of human capital but opportunities for emigration
also raise expected returns to education. I examine these effects by considering the introduction of
education as a selection criterion to recruit Nepalese men in the British Army. This change raised
educational investments by 1.15 years and increased the average education of men living in Nepal
even after allowing for emigration. Despite not being selected in the British Army or emigrating
elsewhere, these non-migrants benefited directly from additional schooling.