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Extending the Case for a Beneficial Brain Drain

  • Simone Bertoli

    ()

    (IAB Nürnberg)

  • Herbert Brücker

    ()

    (Universität Bamberg)

Several destination countries still adopt general immigration policies, and are characterized by lower returns to education than the countries of origin of the migrants. These two stylized facts challenge the literature on the beneficial brain drain which demonstrates that migration can increase the average human capital in the sending countries if immigration policies are selective, or the skill premium at destination is higher than at origin. We propose a model with empirically sensible assumptions on immigration policies and skill premia, where individuals face heterogeneous and correlated education and migration costs. The model is consistent with a robust stylized fact, namely that the rate of migration increases with schooling, and it shows that the average level of education of the stayers can be increasing in the probability to migrate even in such a setting. Our simulation results prove that these findings hold for reasonable parameter values. This extends the case for a beneficial brain drain in a further direction.

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Article provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

Volume (Year): 231 (2011)
Issue (Month): 4 (August)
Pages: 466-478

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Handle: RePEc:jns:jbstat:v:231:y:2011:i:4:p:466-478
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  1. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September.
  2. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A Brain Gain with a Brain Drain," Economics Series 45, Institute for Advanced Studies.
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