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Rethinking The Brain Drain

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  • Stark, Oded

Abstract

When productivity is fostered by both the individual's human capital and by the average level of human capital in the economy, individuals under-invest in human capital. A strictly positive probability of migration to a richer country, by raising both the level of human capital formed by optimizing individuals in the home country and the average level of human capital of non-migrants in the country, can enhance welfare and nudge the economy toward the social optimum. Under a well-controlled restrictive migration policy the welfare of all workers is higher than in the absence of this policy.

Suggested Citation

  • Stark, Oded, 2003. "Rethinking The Brain Drain," Discussion Papers 18770, University of Bonn, Center for Development Research (ZEF).
    • Handle: RePEc:ags:ubzefd:18770
    DOI: 10.22004/ag.econ.18770
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