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Brain drain and Remittances: implications for the source country

Author

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  • Dilek Cinar
  • Frédéric Docquier

Abstract

In this paper, we model a developing economy in which individual decisions about education and migration are constrained by capital market imperfections (liquidity constraints). We examine the joint impact of brain drain and international remittances on human capital accumulation in the emigration country. We derive the condition under which the emigration of the most talented workers stimulates the economy-wide average stock of human capital in the sending country (compared to the closed economy benchmark). Such a BBD outcome (beneficial brain drain) is obtained (i) when the return to education is high compared to the costs of education and migration and (ii) when remittances received by each young are important. Unlike recent papers in that literature, the BBD cannot be obtained if emigration rates are small.

Suggested Citation

  • Dilek Cinar & Frédéric Docquier, 2004. "Brain drain and Remittances: implications for the source country," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 47(1), pages 103-118.
    • Handle: RePEc:bxr:bxrceb:y:2004:v:47:i:1:p:102-118
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    Citations

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    Cited by:

    1. Ziesemer, Thomas H.W., 2010. "The impact of the credit crisis on poor developing countries: Growth, worker remittances, accumulation and migration," Economic Modelling, Elsevier, vol. 27(5), pages 1230-1245, September.
    2. Docquier, Frederic & Rapoport, Hillel, 2004. "Skilled migration: the perspective of developing countries," Policy Research Working Paper Series 3382, The World Bank.
    3. David de la Croix & Axel Gosseries, 2007. "Procreation, Migration and Tradable Quotas," Chapters, in: Robert L. Clark & Naohiro Ogawa & Andrew Mason (ed.), Population Aging, Intergenerational Transfers and the Macroeconomy, chapter 9, Edward Elgar Publishing.
    4. Yaşar AYYILDIZ, 2014. "İşçi Dövizlerinin Kırgızistan Açısından Değerlendirilmesi: Göçmen İşçiler Araştırması," Sosyoekonomi Journal, Sosyoekonomi Society, issue 21(21).
    5. Chaitali Sinha, 2017. "International Migration and Welfare Implications," South Asian Journal of Macroeconomics and Public Finance, , vol. 6(2), pages 209-229, December.
    6. 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.
    7. GOSCHIN Zizi & ROMAN Monica & DANCIU Aniela-Raluca, 2013. "The Brain Drain Phenomenon In Romania. Magnitude, Characteristics, Implications," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 65(5), pages 190-206.
    8. Ziesemer, Thomas H.W., 2012. "Worker remittances, migration, accumulation and growth in poor developing countries: Survey and analysis of direct and indirect effects," Economic Modelling, Elsevier, vol. 29(2), pages 103-118.
    9. repec:dgr:unumer:2008063 is not listed on IDEAS
    10. Ziesemer Thomas H.W., 2009. "Worker Remittances and Growth: The Physical and Human Capital Channels," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(6), pages 743-773, December.

    More about this item

    Keywords

    skilled migration; immigration policy; human capital; growth;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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