Rethinking the brain drain: Dynamics and transition
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.
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- 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.
- Stark, Oded & Fan, C. Simon, 2007. "The Brain Drain, "Educated Unemployment," Human Capital Formation, and Economic Betterment," Discussion Papers 7122, University of Bonn, Center for Development Research (ZEF).
- Oded Stark & C. Simon Fan, 2007. "The Brain Drain, “Educated Unemployment,” Human Capital Formation, and Economic Betterment," CEDI Discussion Paper Series 07-01, Centre for Economic Development and Institutions(CEDI), Brunel University.
- Stark, Oded, 2004.
"Rethinking the Brain Drain,"
Elsevier, vol. 32(1), pages 15-22, January.
- Stark, Oded & Fan, C. Simon, 2006.
"International Migration and "Educated Unemployment","
7126, University of Bonn, Center for Development Research (ZEF).
- Fan, C. Simon & Stark, Oded, 2007. "International migration and "educated unemployment"," Journal of Development Economics, Elsevier, vol. 83(1), pages 76-87, May.
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