Emigration Prospects and Educational Choices: Evidence from the Lorraine-Luxembourg Corridor

An extensive literature has documented the incentive effect of emigration prospects in terms of human capital accumulation at origin. Less attention has been paid to the impact on specific educational choices. Using novel data from graduates from the University of Lorraine (France) we find that students who paid attention to the foreign labor market at the time of enrollment tend to choose topics that lead to highly-valued occupations in Luxembourg, a booming economy across the border. These results hold when accounting for heterogeneous substitution patterns and for the potential endogeneity of the interest for the foreign labor market.