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Skilled migration and growth. Testing brain drain and brain gain theories

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  • José Luis Groizard

    ()
    (Universitat de les Illes Balears)

  • Joan Llull

    ()
    (Universitat de les Illes Balears)

Abstract

The economic effects of the migration of skilled workers from developing countries are highly controversial in the theoretical literature. Traditional models on the brain drain phenomenon stress the negative impact on growth, while new models introduce the possibility of a brain gain for labor exporting economies through indirect channels (i.e. increased incentives for those individuals left behind to accumulate human capital), or direct channels (such as remittances, return migration or FDI and trade linkages). Using a new dataset on the educational level of the migration workforce into the OECD, we test the hypothesis of brain gain estimating a growth equation and a human capital equation. We reject the hypothesis of brain gain in all the cases. The results confirm that countries which export high skilled labor to rich economies tend to have a lower level of human capital and, hence, worse economic performance.

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Bibliographic Info

Paper provided by Universitat de les Illes Balears, Departament d'Economía Aplicada in its series DEA Working Papers with number 20.

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Date of creation: 2006
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Handle: RePEc:ubi:deawps:20

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Keywords: Human capital formation; international migration; skilled workers; development; source country effects; instrumental variables.;

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Cited by:
  1. Daniele Checchi & Gianfranco De Simone & Riccardo Faini, 2007. "Skilled Migration, FDI and Human Capital Investment," Development Working Papers 235, Centro Studi Luca d\'Agliano, University of Milano.

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