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Brain drain and Remittances: implications for the source country

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  • Dilek Cinar
  • Frédéric Docquier

Abstract

In this paper, we model a developing economy in which individual decisions about education and migration are constrained by capital market imperfections (liquidity constraints). We examine the joint impact of brain drain and international remittances on human capital accumulation in the emigration country. We derive the condition under which the emigration of the most talented workers stimulates the economy-wide average stock of human capital in the sending country (compared to the closed economy benchmark). Such a BBD outcome (beneficial brain drain) is obtained (i) when the return to education is high compared to the costs of education and migration and (ii) when remittances received by each young are important. Unlike recent papers in that literature, the BBD cannot be obtained if emigration rates are small.

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Bibliographic Info

Article provided by ULB -- Universite Libre de Bruxelles in its journal Brussels economic review.

Volume (Year): 47 (2004)
Issue (Month): 1 ()
Pages: 103-118

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Handle: RePEc:bxr:bxrceb:y:2004:v:47:i:1:p:102-118

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Related research

Keywords: skilled migration; immigration policy; human capital; growth;

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Cited by:
  1. Docquier, Frederic & Rapoport, Hillel, 2004. "Skilled migration: the perspective of developing countries," Policy Research Working Paper Series 3382, The World Bank.
  2. Thomas H.W. Ziesemer, 2009. "Worker Remittances and Growth: The Physical and Human Capital Channels," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 229(6), pages 743-773, December.
  3. Ziesemer, Thomas, 2010. "The Impact of the Credit Crisis on Poor Developing Countries and the Role of China in Pulling and Crowding Us Out," MERIT Working Papers 004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  4. José Luis Groizard & Joan Llull, 2006. "Skilled migration and growth. Testing brain drain and brain gain theories," DEA Working Papers, Universitat de les Illes Balears, Departament d'Economía Aplicada 20, Universitat de les Illes Balears, Departament d'Economía Aplicada.
  5. Ziesemer, Thomas H.W., 2010. "The impact of the credit crisis on poor developing countries: Growth, worker remittances, accumulation and migration," Economic Modelling, Elsevier, Elsevier, vol. 27(5), pages 1230-1245, September.
  6. Ziesemer, Thomas, 2008. "Worker remittances, migration, accumulation and growth in poor developing countries," MERIT Working Papers 063, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  7. Ziesemer, Thomas H.W., 2012. "Worker remittances, migration, accumulation and growth in poor developing countries: Survey and analysis of direct and indirect effects," Economic Modelling, Elsevier, Elsevier, vol. 29(2), pages 103-118.

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