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Brain Gain: Claims about Its Size and Impact on Welfare and Growth Are Greatly Exaggerated

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Author Info
Maurice Schiff () (World Bank and IZA Bonn)

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Abstract

Based on static partial equilibrium analysis, the "new brain drain" literature argues that, by raising the return to education, a brain drain generates a brain gain that is, under certain conditions, larger than the brain drain itself, and that such a net brain gain results in an increase in welfare and growth due to education’s positive externalities. This paper, on the other hand, argues that these claims are exaggerated. In the static case, and based on both partial and general equilibrium considerations, the paper shows that i) the size of the brain gain is smaller than suggested in that literature; ii) the impact on welfare and growth is smaller as well (for any brain gain size); iii) a positive brain gain is likely to result in a smaller human capital gain and may even have a negative impact on the stock of human capital; iv) an increase in the stock of human capital may have a negative impact on welfare and growth; and v) in a dynamic framework, the paper shows that the brain drain is unambiguously larger than the brain gain, i.e., that the steady state is characterized by a net brain loss.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1599.

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Length: 38 pages
Date of creation: May 2005
Date of revision:
Handle: RePEc:iza:izadps:dp1599

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Related research
Keywords: brain gain size; welfare; growth; exaggerated claims;

Other versions of this item:

Find related papers by JEL classification:
D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
D62 - Microeconomics - - Welfare Economics - - - Externalities
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
I12 - Health, Education, and Welfare - - Health - - - Health Production
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October. [Downloadable!] (restricted)
  2. Docquier, Frederic & Rapoport, Hillel, 2004. "Skilled migration: the perspective of developing countries," Policy Research Working Paper Series 3382, The World Bank. [Downloadable!]
    Other versions:
  3. Alderman,Harold & Hoddinott, John & Kinsey, Bill, 2003. "Long-term consequences of early childhood malnutrition," FCND briefs 168, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  4. Stark, Oded, 2004. "Rethinking the Brain Drain," World Development, Elsevier, vol. 32(1), pages 15-22, January. [Downloadable!] (restricted)
  5. Mattoo, Aaditya & Neagu, Ileana Cristina & Ozden, Caglar, 2005. "Brain waste? Educated immigrants in the U.S. labor market," Policy Research Working Paper Series 3581, The World Bank. [Downloadable!]
    Other versions:
  6. Simon Commander & Mari Kangasniemi & L. Alan Winters, 2004. "The Brain Drain: Curse or Boon? A Survey of the Literature," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 235-278 National Bureau of Economic Research, Inc. [Downloadable!]
  7. Jean-Pierre Vidal, 1998. "The effect of emigration on human capital formation," Journal of Population Economics, Springer, vol. 11(4), pages 589-600. [Downloadable!] (restricted)
  8. John Strauss & Duncan Thomas, 1998. "Health, Nutrition, and Economic Development," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 766-817, June. [Downloadable!] (restricted)
    Other versions:
  9. Solimano, Andres, 2001. "International migration and the global economic order : an interview," Policy Research Working Paper Series 2720, The World Bank. [Downloadable!]
  10. 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. [Downloadable!] (restricted)
  11. Enrica Detragiache & William Carrington, 1998. "How Big is the Brain Drain?," IMF Working Papers 98/102, International Monetary Fund.
  12. Ramón López & Maurice Schiff, 1998. "Migration and the Skill composition of the Labor Force: The Impact of Trade Liberalization in LDCs," Canadian Journal of Economics, Canadian Economics Association, vol. 31(2), pages 318-336, May.
  13. Dora L. Costa, 2003. "Health and Labor Force Participation over the Life Cycle: Evidence from the Past," NBER Books, National Bureau of Economic Research, Inc, number cost03-1.
  14. Schiff, Maurice & Valdes, Alberto, 1990. "Nutrition: Alternative Definitions and Policy Implications," Economic Development and Cultural Change, University of Chicago Press, vol. 38(2), pages 281-92, January.
  15. Adams, Richard H. Jr., 2003. "International migration, remittances, and the brain drain ; a study of 24 labor exporting countries," Policy Research Working Paper Series 3069, The World Bank. [Downloadable!]
  16. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Frédéric Docquier & Olivier Lohest & Abdeslam Marfouk, 2005. "Brain Drain in Developing Regions (1990-2000)," IZA Discussion Papers 1668, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Karin Mayr & Giovanni Peri, 2008. "Return Migration as a Channel of Brain Gain," NBER Working Papers 14039, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Rutten, Martine, 2008. "Medical migration : what can we learn from the UK's perspective ?," Policy Research Working Paper Series 4593, The World Bank. [Downloadable!]
  4. Ziesemer, Thomas, 2008. "Worker remittances, migration, accumulation and growth in poor developing countries," UNU-MERIT Working Paper Series 063, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  5. José Luis Groizard & Joan Llull, 2006. "Skilled migration and growth. Testing brain drain and brain gain theories," DEA Working Papers 20, Universitat de les Illes Balears, Departament d'Economía Aplicada. [Downloadable!]
  6. Rosalind S Hunter, 2009. "The Elite Brain Drain," Working Papers id:2048, esocialsciences.com. [Downloadable!]
  7. Frederic, DOCQUIER & Olivier, LOHEST & Abdeslam, MARFOUK, 2007. "Brain drain in developing countries," Discussion Papers (ECON - Département des Sciences Economiques) 2007004, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
    Other versions:
  8. Hunter, Rosalind S. & Oswald, Andrew J. & Charlton, Bruce G., 2009. "The Elite Brain Drain," IZA Discussion Papers 4005, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
    • RosalindS. Hunter & AndrewJ. Oswald & BruceG. Charlton, 2009. "The Elite Brain Drain," Economic Journal, Royal Economic Society, vol. 119(538), pages F231-F251, 06. [Downloadable!] (restricted)
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