The brain drain has long been viewed as a serious constraint on poor countries development. However, recent theoretical literature suggests that emigration prospects can raise the expected return to human capital and foster investment in education at home. This paper takes advantage of a new dataset on emigration rates by education level (Docquier and Marfouk, 2006) to examine the impact of brain drain migration on human capital formation in developing countries. We find evidence of a positive effect of skilled migration prospects on gross human capital levels in a cross-section of 127 developing countries. For each country we then estimate the net effect of the brain drain using counterfactual simulations. We find that countries combining relatively low levels of human capital and low skilled emigration rates are likely to experience a net gain, and conversely. There appears to be more losers than winners, and in addition the former tend to lose relatively more than what the latter gain. At an aggregate level however, and given that the largest developing countries are all among the winners, brain drain migration may be seen not only as increasing the number of skilled workers worldwide but also the number of such workers living in developing countries.
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Find related papers by JEL classification: F22 - International Economics - - International Factor Movements and International Business - - - International Migration J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
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