This study clarifies the effects of accepting study migrants on the host country’s human capital in a situation where study migrants harm the natives’ human capital formation, utilising an analytical method. Since study migrants exert negative effects on natives’ education (e.g., they do not fully understand the local language), natives may build smaller human capital, and the host country’s human capital may decrease. Previous studies have not examined their indirect effect. This study assumes that all study migrants leave their host country after education. The findings demonstrate that when the wage disparity is small, the host country experiences the brain drain because natives build smaller human capital due to the negative effects of study migrants, and some natives emigrate. However, the country can alleviate this by increasing the number of study migrants. When the wage disparity is large, the country experiences the brain gain since natives build larger human capital, even though study migrants affect them negatively, and some natives emigrate. The country can enhance this by reducing study migrants. This study contributes to the literature by including the study migrants’ indirect effect on natives’ human capital formation and showing the possibility of controlling the brain drain/gain. © The Author(s), under exclusive licence to Springer Nature Switzerland AG 2022. Springer Nature or its licensor holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
