Education in the East, Emigrating to the West?

This paper examines the potential impact of East–West migration of talent on the innovative capital and hence the long-run growth prospects in Eastern sending countries. Complementing previous studies, we examine the impact of high-skill migration not only on the formation of human capital, but also consider migration’s impact on knowledge capital in the sending countries. In line with previous studies, we find that, in the short- to medium-term, high-skill migration strictly reduces national innovative capital and hence increases the gap between East and West. However, these effects might be mitigated by factors such as reinforced education of workers, productive investment of remittances, return migration and increased knowledge transfer. Given that the emigration of highly skilled labour affects human capital differently than it does knowledge capital, differentiated policies are required for human capital and knowledge capital in order to efficiently address the adverse impact of the most talented and highly skilled workers.