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Rethinking the brain drain: Dynamics and transition

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  • Byra, Lukasz
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    Abstract

    This paper injects a time dimension into the static, instantaneous adjustment model of Stark (2004). The paper assumes that in response to the incentive conferred by the prospect of migration, the average level of human capital – the source of a productivity-enhancing externality – changes gradually rather than immediately. This might seem to imply that, contrary to what is claimed in Stark (2004), the welfare of the workers who do not migrate, and who early on in the transition period adjust their level of human capital in response to the prospect of migration, declines because these workers do not face a higher average level of human capital. Rather surprisingly, however, the paper finds that the welfare result of Stark (2004) is robust to the relaxation of his assumption of instantaneous adjustment: even “pioneer” workers, who form more human capital in an environment in which the prevailing average level of human capital is approximately at the pre-migration level, are strictly better off when there is a prospect of migration than when there is not.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1059056013000397
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    Bibliographic Info

    Article provided by Elsevier in its journal International Review of Economics & Finance.

    Volume (Year): 28 (2013)
    Issue (Month): C ()
    Pages: 19-25

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    Handle: RePEc:eee:reveco:v:28:y:2013:i:c:p:19-25

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    Web page: http://www.elsevier.com/locate/inca/620165

    Related research

    Keywords: Human capital formation; Migration; Brain drain; Externalities; Dynamics; Social welfare;

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    1. Fan, C. Simon & Stark, Oded, 2007. "International migration and "educated unemployment"," Journal of Development Economics, Elsevier, vol. 83(1), pages 76-87, May.
    2. Stark, Oded, 2004. "Rethinking the Brain Drain," World Development, Elsevier, vol. 32(1), pages 15-22, January.
    3. C. Simon Fan & Oded Stark, 2007. "The brain drain, 'educated unemployment', human capital formation, and economic betterment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15, pages 629-660, October.
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