Brain gain : claims about its size and impact on welfare and growth are greatly exaggerated
AbstractBased 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 argues that these claims are exaggerated. In the static case, and based on both partial and general equilibrium considerations, the paper shows that (1) the size of the brain gain is smaller than suggested in that literature; (2) the impact on welfare and growth is smaller as well (for any brain gain size); (3) a positive brain gain is likely to result in a smaller, possibly negative, human capital gain; (4) an increase in the stock of human capital may have a negative impact on welfare and growth; and (5) in a dynamic framework, the paper shows that the steady-state brain gain is equal to the brain drain so that a'beneficial brain drain'cannot take place, and a net brain loss is likely during the transition.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3708.
Date of creation: 01 Sep 2005
Date of revision:
International Migration; Health Monitoring&Evaluation; Curriculum&Instruction; Economic Theory&Research; Education and Society;
Other versions of this item:
- Schiff, Maurice, 2005. "Brain Gain: Claims about Its Size and Impact on Welfare and Growth Are Greatly Exaggerated," IZA Discussion Papers 1599, Institute for the Study of Labor (IZA).
- 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
- J - Labor and Demographic Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-14 (All new papers)
- NEP-EDU-2005-12-14 (Education)
- NEP-HRM-2005-12-14 (Human Capital & Human Resource Management)
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