Emigration and the quality of home country institutions
AbstractEmigration affects institutions at home in a number of ways. While people may have fewer incentives to voice when they have exit options, emigrants can voice once abroad and contribute to the diffusion of democratic values and norms. We first document these channels and then consider dynamic-panel regressions to investigate the overall impact of emigration on institutions in the home country. We find that both openess to migration and human capital have a positive impact on institutions (as measured by standard democracy and economic freedom indices). This implies that unskilled migration has a positive effect on institutional quality while the effect of skilled migration (or brain drain) is ambiguous. Using the point estimates from our regressions, we simulate the marginal effect of skilled emigration on institutional quality. In general, the simulations confirm that the brain drain has an ambiguous impact on institutions, though a significant institutional gain obtains for a limited set of countries when incentive effects of the brain drain on human capital formation are taken into account.
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Bibliographic InfoPaper 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 2010035.
Date of creation: 20 Sep 2010
Date of revision:
Migration; brain drain; institutions; diaspora effects; democracy;
Find related papers by JEL classification:
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-16 (All new papers)
- NEP-CMP-2010-10-16 (Computational Economics)
- NEP-HRM-2010-10-16 (Human Capital & Human Resource Management)
- NEP-LAB-2010-10-16 (Labour Economics)
- NEP-MIG-2010-10-16 (Economics of Human Migration)
- NEP-SOC-2010-10-16 (Social Norms & Social Capital)
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