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Do brain drain and poverty result from coordination failures?

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  • David Croix

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  • Frédéric Docquier

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Abstract

We explore the complementarities between high-skill emigration and poverty in developing countries. We build a model endogenizing human-capital accumulation, high-skill migration and productivity. Two countries sharing the same characteristics may end up either in a “low poverty/low brain drain” path or in a “high poverty/high brain drain” path. After identifying country-specific parameters, we find that, for a majority of countries, the observed equilibrium has higher income than the other possible one. In 22 developing countries (including 20 small states with less than 2 million inhabitants), poverty and high brain drain are worsened by a coordination failure. For 25 other countries, a radical worsening of economic performances is feasible. These results are fairly robust to identification assumptions and the inclusion of a brain-gain mechanism.
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Suggested Citation

  • David Croix & Frédéric Docquier, 2012. "Do brain drain and poverty result from coordination failures?," Journal of Economic Growth, Springer, vol. 17(1), pages 1-26, March.
  • Handle: RePEc:kap:jecgro:v:17:y:2012:i:1:p:1-26
    DOI: 10.1007/s10887-011-9073-2
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    Cited by:

    1. Frédéric Docquier & Tobias Müller & Joaquín Naval, 2017. "Informality and Long-Run Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(4), pages 1040-1085, October.
    2. Fabio Mariani & Marion Mercier & Thierry Verdier, 2016. "Diasporas and Conflict," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2016024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    3. Frédéric Docquier, 2014. "The brain drain from developing countries," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-31, May.
    4. Dequiedt, Vianney & Zenou, Yves, 2013. "International migration, imperfect information, and brain drain," Journal of Development Economics, Elsevier, vol. 102(C), pages 62-78.
    5. Diana Loubaki, 2012. "On The Mechanics Of The Brain-Drain Reduction In Poorest Developing Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 37(3), pages 75-106, September.
    6. Chrysovalantis VASILAKIS, 2014. "Globalized Market for Talents and Inequality: What Can Be Learnt from European Football?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2014001, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    7. Bénassy, Jean-Pascal & Brezis, Elise S., 2013. "Brain drain and development traps," Journal of Development Economics, Elsevier, vol. 102(C), pages 15-22.
    8. David de la Croix & Frederic Docquier, 2015. "An Incentive Mechanism to Break the Low-skill Immigration Deadlock," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(3), pages 593-618, July.
    9. Michal Burzynski, 2016. "Time, Space and Skills in Designing Migration Policy," CREA Discussion Paper Series 16-12, Center for Research in Economic Analysis, University of Luxembourg.
    10. Harald Fadinger & Karin Mayr, 2014. "Skill-Biased Technological Change, Unemployment, And Brain Drain," Journal of the European Economic Association, European Economic Association, vol. 12(2), pages 397-431, April.
    11. Frédéric Docquier & Joël Machado & Khalid Sekkat, 2015. "Efficiency Gains from Liberalizing Labor Mobility," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 303-346, April.
    12. Aubry, Amandine & Burzyński, Michał & Docquier, Frédéric, 2016. "The welfare impact of global migration in OECD countries," Journal of International Economics, Elsevier, vol. 101(C), pages 1-21.
    13. Driouchi, Ahmed & Kadiri, Molk, 2010. "Emigration of Skilled Labor under Risk Aversion: The Case of Medical Doctors from Middle Eastern and North African Economies," MPRA Paper 22810, University Library of Munich, Germany, revised 20 May 2010.
    14. Vasilakis, Chrysovalantis, 2013. "Globalized Market for Talents and Inequality: What Can Be Learnt from European Football?," The Warwick Economics Research Paper Series (TWERPS) 1034, University of Warwick, Department of Economics.
    15. David de la CROIX & Frédéric DOCQUIER & Maurice SCHIFF, 2013. "Brain Drain and Economic Performance in Small Island Developing States," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    16. repec:eee:dyncon:v:85:y:2017:i:c:p:150-166 is not listed on IDEAS
    17. repec:bla:intfin:v:20:y:2017:i:1:p:100-112 is not listed on IDEAS

    More about this item

    Keywords

    Brain drain; Development; Multiple equilibria; Coordination failure; F22; O11; O15; C62;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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