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Institutional Impact of Brain Drain, Human Capital, and Inequality: A Political Economy Analysis

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  • Maurice Schiff
  • Frédéric Docquier

Abstract

This paper uses an "exit and voice" political economy model to examine the institutional impact of brain drain, human capital, and inequality. Some of the main findings are: 1) the impact of brain drain m on institutional quality is U-shaped, with a maximum at m = 0; 2) the institutional impact of human capital h is U-shaped; 3) the likelihood that institutions will improve with m (h) is inversely related to international (domestic) inequality. Thus, the prospect that institutions will improve with human capital is likely to be small in SSA and LAC, where income inequality is substantially higher than in East Asia.

Suggested Citation

  • Maurice Schiff & Frédéric Docquier, 2016. "Institutional Impact of Brain Drain, Human Capital, and Inequality: A Political Economy Analysis," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 53(1), pages 95-110, December.
    • Handle: RePEc:ioe:cuadec:v:53:y:2016:i:1:p:95-110
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    References listed on IDEAS

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    1. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    2. Docquier, Frederic & Rapoport, Hillel, 2003. "Ethnic discrimination and the migration of skilled labor," Journal of Development Economics, Elsevier, vol. 70(1), pages 159-172, February.
    3. Kugler, Maurice & Rapoport, Hillel, 2007. "International labor and capital flows: Complements or substitutes?," Economics Letters, Elsevier, vol. 94(2), pages 155-162, February.
    4. Michel Beine & Fréderic Docquier & Hillel Rapoport, 2008. "Brain Drain and Human Capital Formation in Developing Countries: Winners and Losers," Economic Journal, Royal Economic Society, vol. 118(528), pages 631-652, April.
    5. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
    6. Jagdish N. Bhagwati, 1976. "Taxing the Brain Drain," Challenge, Taylor & Francis Journals, vol. 19(3), pages 34-38, July.
    7. North, Douglass C., 1971. "Institutional Change and Economic Growth," The Journal of Economic History, Cambridge University Press, vol. 31(1), pages 118-125, March.
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    Cited by:

    1. Docquier, Frédéric & Schiff, Maurice, 2021. "A Political Economy and Voicing Model of the Institutional Impact of Brain Drain, Human Capital, Inequality and Country Size," IZA Discussion Papers 14460, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    human capital; brain drain; inequality; institutional impact; political economy;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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