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Do Brain Drain and Poverty Result from Coordination Failures?

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  • David de la Croix

    ()
    (IRES and CORE, Universite catholique de Louvain)

  • Frederic Docquier

    ()
    (National Fund for Scientific Research (Belgium) and IRES, Universite catholique de Louvain)

Abstract

We explore the complementarities between high-skill emigration and poverty in developing countries. We build a model endogenizing human-capital accumulation, high-skill migration and productivity. Two countries sharing the same characteristics may end up either in a "low poverty/low brain drain" path or in a "high poverty/high brain drain" path. After identifying country-specific parameters, we find that, for a majority of countries, the observed equilibrium has higher income than the other possible one. In 22 developing countries (including 20 small states with less than 2 million inhabitants), poverty and high brain drain are worsened by a coordination failure. For 25 other countries, a radical worsening of economic performances is feasible. These results are fairly robust to identification assumptions and the inclusion of a brain-gain mechanism.

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Bibliographic Info

Paper provided by Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London in its series CReAM Discussion Paper Series with number 1009.

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Date of creation: May 2010
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Handle: RePEc:crm:wpaper:1009

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Keywords: Public Good; Inequality Aversion; Immigration policy;

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Citations

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Cited by:
  1. Jean-Pascal Bénassy & Elise S. Brézis, 2012. "Brain Drain and Development Traps," Working Papers 2012-03, Department of Economics, Bar-Ilan University.
  2. Dequiedt, Vianney & Zenou, Yves, 2011. "International Migration, Imperfect Information, and Brain Drain," IZA Discussion Papers 5786, Institute for the Study of Labor (IZA).
  3. Vasilakis, Chrysovalantis, 2013. "Globalized Market for Talents and Inequality: What Can Be Learnt from European Football?," The Warwick Economics Research Paper Series (TWERPS) 1034, University of Warwick, Department of Economics.
  4. Harald Fadinger & Karin Mayr, 2011. "Skill-biased technological change, unemployment and brain drain," Vienna Economics Papers 1108, University of Vienna, Department of Economics.
  5. Frédéric DOCQUIER & Joël MACHADO & Khalid SEKKAT, 2012. "Efficiency gains from liberalizing labor mobility," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2012023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  6. David de la CROIX & Frédéric DOCQUIER & Maurice SCHIFF, 2013. "Brain Drain and Economic Performance in Small Island Developing States," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  7. Docquier, Frédéric & Müller, Tobias & Naval, Joaquín, 2014. "Informality and Long-Run Growth," IZA Discussion Papers 7883, Institute for the Study of Labor (IZA).
  8. Diana Loubaki, 2012. "On The Mechanics Of The Brain-Drain Reduction In Poorest Developing Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 37(3), pages 75-106, September.
  9. Driouchi, Ahmed & Kadiri, Molk, 2010. "Emigration of Skilled Labor under Risk Aversion: The Case of Medical Doctors from Middle Eastern and North African Economies," MPRA Paper 22810, University Library of Munich, Germany, revised 20 May 2010.

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