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International Student Mobility and Labor Market Outcomes: Evidence from Palestine Through the Lens of Signaling Theory
Abstract
This chapter examines the private returns to studying abroad in the context of Palestine, using data from the Palestinian Labor Force Survey. Drawing on signaling theory, the chapter investigates how international student mobility affects labor market outcomes, emphasizing the wage premiums and employability advantages conferred by foreign education. The findings reveal substantial private returns to studying abroad, where foreign degrees are perceived as credible signals of higher productivity, competence, and adaptability. The results also demonstrate a gradient in returns based on the classification of the country of graduation and the level of education attained, with postgraduate degrees obtained abroad yielding the highest returns. These findings show the critical role of signaling in labor markets, the challenges facing the Palestinian domestic education system, and the need for reforms to enhance its quality and relevance to the labor market needs. The chapter offers policy recommendations to balance the benefits of education mobility with efforts to foster equitable access to high-quality education.
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