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Brain Drain or Brain Gain? International labor mobility and human capital formation

Author

Listed:
  • Anelí Bongersy

    (Universidad de Málaga)

  • Carmen Díaz-Roldán

    (Universidad de Castilla-La Mancha)

  • José L. Torres

    (Universidad de Málaga)

Abstract

This paper studies the impact of international labor migration on human capital invest- ment in both destination and origin countries using an integrated theoretical framework. We develop a two-country Dynamic Stochastic General Equilibrium human capital investment model with international labor mobility, in which both decision to migrate and to invest in skill acquisition are endogenous. We show that human capital formation process in the coun- tries of origin is very sensible to migration policies implemented by destination countries. Our results show that human capital accumulation in the country of origin is encouraged by the possibility of emigration to higher labor productivity countries, supporting the recent view of the "brain gain" hypothesis. Productivity shocks hitting the destination country reduces human capital investment by natives but increase human capital investment in the country of origin when migration is allowed. Finally, we find that migration increases world human capital, increasing the stock of human capital in both destination and origin countries.

Suggested Citation

  • Anelí Bongersy & Carmen Díaz-Roldán & José L. Torres, 2018. "Brain Drain or Brain Gain? International labor mobility and human capital formation," Working Papers 18-04, Asociación Española de Economía y Finanzas Internacionales.
  • Handle: RePEc:aee:wpaper:1804
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    References listed on IDEAS

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    More about this item

    Keywords

    Migration; Brain Drain; Brain Gain; Human capital formation; Migration policy;
    All these keywords.

    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

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