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Rethinking the brain drain: Dynamics and transition

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  • Byra, Lukasz

Abstract

This paper injects a time dimension into the static, instantaneous adjustment model of Stark (2004). The paper assumes that in response to the incentive conferred by the prospect of migration, the average level of human capital – the source of a productivity-enhancing externality – changes gradually rather than immediately. This might seem to imply that, contrary to what is claimed in Stark (2004), the welfare of the workers who do not migrate, and who early on in the transition period adjust their level of human capital in response to the prospect of migration, declines because these workers do not face a higher average level of human capital. Rather surprisingly, however, the paper finds that the welfare result of Stark (2004) is robust to the relaxation of his assumption of instantaneous adjustment: even “pioneer” workers, who form more human capital in an environment in which the prevailing average level of human capital is approximately at the pre-migration level, are strictly better off when there is a prospect of migration than when there is not.

Suggested Citation

  • Byra, Lukasz, 2013. "Rethinking the brain drain: Dynamics and transition," International Review of Economics & Finance, Elsevier, vol. 28(C), pages 19-25.
  • Handle: RePEc:eee:reveco:v:28:y:2013:i:c:p:19-25
    DOI: 10.1016/j.iref.2013.05.004
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    References listed on IDEAS

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    1. Fan, C. Simon & Stark, Oded, 2007. "International migration and "educated unemployment"," Journal of Development Economics, Elsevier, vol. 83(1), pages 76-87, May.
    2. C. Simon Fan & Oded Stark, 2007. "The brain drain, 'educated unemployment', human capital formation, and economic betterment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15, pages 629-660, October.
    3. Stark, Oded, 2004. "Rethinking the Brain Drain," World Development, Elsevier, vol. 32(1), pages 15-22, January.
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    Cited by:

    1. repec:eee:regeco:v:66:y:2017:i:c:p:91-107 is not listed on IDEAS
    2. Stark, Oded & Byra, Lukasz & Casarico, Alessandra & Uebelmesser, Silke, 2017. "A critical comparison of migration policies: Entry fee versus quota," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 91-107.

    More about this item

    Keywords

    Human capital formation; Migration; Brain drain; Externalities; Dynamics; Social welfare;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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