Abstract
For decades, the "Kerala Model" of development was sustained by a steady influx of labor remittances. However, by late 2025, a structural paradigm shift has emerged: the transition from labor export to international student migration. This study evaluates the drivers of household investment elasticity between domestic higher education and international migration pathways in Kerala. Using a mixed-methods approach and a structural equation model (SEM), we analyze the "Reverse Remittance Trap"—a phenomenon where the financial outflow for foreign tuition and living expenses outpaces domestic capital accumulation. The findings indicate a high investment elasticity (IE > 1.5), suggesting that even marginal declines in the perceived utility of domestic degrees trigger disproportionate surges in foreign education expenditure. This shift is driven by a "perceived obsolescence" of local curricula and a "contagion effect" among middle-class households. Notably, the study reveals an "Asset-Education Swap," where families liquidate ancestral land and gold to fund high-interest migration loans. As global visa policies in destination hubs like the UK and Canada tighten in 2025, these households face acute financial vulnerability. The paper concludes that without urgent structural reform to domestic degree utility, Kerala risks a permanent drain of generational wealth and a collapse of its traditional remittance-led economic stability.