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Unknown Talents and the Brain Drain: The Informational Role of Migration

Author

Listed:
  • Pasquale Scaramozzino

    (University of Rome II - Faculty of Economics
    SOAS, University of London - Department of Financial and Management Studies)

  • Yasmeen Khwaja

    (Brunel University - Economics and Finance)

Abstract

This paper shows that the migration of educated workers abroad can convey a positive signal about the ability of native talents. When there is uncertainty about the distribution of talents in the donor country and/or about the effectiveness of its education system, migrants may reveal information about their talents. This may enhance the reputation of the workforce both in the host country and in the donor country. The brain drain can thus act as an information device. The main possible consequences of the brain drain are: (i) higher investment in human capital by the younger generations; and (ii) higher investment in the domestic economy. The out-migration of talented people could be an essential condition for long-run growth in the donor economy.

Suggested Citation

  • Pasquale Scaramozzino & Yasmeen Khwaja, 2003. "Unknown Talents and the Brain Drain: The Informational Role of Migration," CEIS Research Paper 33, Tor Vergata University, CEIS.
    • Handle: RePEc:rtv:ceisrp:33
    as

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    File URL: https://ceistorvergata.it/RePEc/rpaper/No-33-Khwaja,Scaramozzino.pdf
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    References listed on IDEAS

    as
    1. Bhagwati, Jagdish & Rodriguez, Carlos, 1975. "Welfare-theoretical analyses of the brain drain," Journal of Development Economics, Elsevier, vol. 2(3), pages 195-221, September.
    2. Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, vol. 86(1), pages 29-46, October.
    3. Lien, Da-Hsiang Donald, 1987. "Economic analysis of brain drain," Journal of Development Economics, Elsevier, vol. 25(1), pages 33-43, February.
    4. Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, vol. 86(1), pages 29-46, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Brain drain; signaling; technology transfers;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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