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Brain drain and factor complementarity

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  • Pieretti, Patrice
  • Zou, Benteng

Abstract

In this paper we develop an extended Solow growth model with emigration which aggregates different types of labor skills from strict complementarity to perfect substitution. The derivation of balanced growth paths shows that the most relevant cases for studying the impact of emigration are those where these paths can only be attained asymptotically. This requires and justifies the need for using transitional dynamics. We therefore derive a complete characterization of the transitional dynamics of output and wages in the sending country for all possible values taken by the elasticity of substitution between skilled and unskilled workers. The model then serves to qualitatively study the effect of brain drain on per capita income and wages of the sending country.

Suggested Citation

  • Pieretti, Patrice & Zou, Benteng, 2009. "Brain drain and factor complementarity," Economic Modelling, Elsevier, vol. 26(2), pages 404-413, March.
    • Handle: RePEc:eee:ecmode:v:26:y:2009:i:2:p:404-413
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    Cited by:

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    2. Brambila Macias, Jose, 2008. "Remittances, Migration and Informality in Mexico. A Simple Model," MPRA Paper 8373, University Library of Munich, Germany.

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    More about this item

    Keywords

    Brain drain Growth Complementarity Migration;

    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
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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