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Do Brain Drain and Poverty Result from Coordination Failures?

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Author Info

  • David DE LA CROIX

    ()
    (IRES and CORE, UCLouvain)

  • Frederic DOCQUIER

    ()
    (National Fund for Scientific Research (Belgium) and IRES, UCLouvain)

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 Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2010016.

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Length: 30
Date of creation: 04 May 2010
Date of revision:
Handle: RePEc:ctl:louvir:2010016

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Keywords: Brain drain; Development; Multiple equilibria; Coordination failure;

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Citations

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Cited by:
  1. Frédéric DOCQUIER & Tobias MÜLLER & Joaquín NAVAL, 2014. "Informality and long-run growth," Working Papers P91, FERDI.
  2. Vianney Dequiedt & Yves Zenou, 2011. "International Migration, Imperfect Information and Brain Drain," Norface Discussion Paper Series 2011009, Norface Research Programme on Migration, Department of Economics, University College London.
  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. Bénassy, Jean-Pascal & Brezis, Elise S., 2013. "Brain drain and development traps," Journal of Development Economics, Elsevier, vol. 102(C), pages 15-22.
  5. Harald Fadinger & Karin Mayr, 2012. "Skill-biased technological change, unemployment and brain drain," FIW Working Paper series 089, FIW.
  6. 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).
  7. 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.
  8. 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).
  9. 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.

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