Brain drain has been perceived as a hindrance to poor countries’ development.
However, by increasing the expected returns to education, improved prospects for
skilled emigration may stimulate human capital investment at home. Empirical
evidence on the net e↵ect of emigration prospects is scarce, largely because characteristics
that drive human capital investment also directly a↵ect the decision to
emigrate. This paper focuses on a natural experiment that involves the recruitment
of Nepali men into the British Army, a tradition that originated during
British colonial rule in South Asia. In 1993 a change in the education requirement
for Nepali recruits resulted in an exogenous, di↵erential increase in their
skilled versus unskilled emigration prospects. Due to a historical pattern of recruitment
established in the mid-19th century, Nepali men of Gurkha ethnicity
were disproportionately a↵ected by this change. I use individual-level information
on ethnicity, gender, and age to motivate a set of di↵erence-in-di↵erence and synthetic
control strategies to estimate e↵ects on educational attainment. Eligible
men responded to the rule change by raising their schooling by over one year, a
30% increase over the average. This increase also occurred for eligible men who
did not emigrate, so there was a net increase in the human capital stock of eligible
men.