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A Note on Brain Gain and Brain Drain: Permanent Migration and Education Policy

  • Alexander Haupt
  • Tim Krieger
  • Thomas Lange

In this note, we present a novel channel for a brain gain. Students from a developing country study in a developed host country. A higher permanent migration probability of these students appears to be a brain drain for the developing country in the first place. However, it induces the host country to improve its education quality, as a larger share of the generated benefits accrue in this host country. A higher education quality raises in turn the human capital of the returning students. As long as the permanent migration probability is not too large, this positive effect causes both aggregate and per-capita human capital to increase in the developing country. Thus, a brain gain occurs.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-08/cesifo1_wp3154.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3154.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3154
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  1. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human Capital Depletion, Human Capital Formation, and Migration. A Blessing in a "Curse"?," Economics Series 55, Institute for Advanced Studies.
  2. Wolfgang Eggert & Tim Krieger & Volker Meier, 2007. "Education, Unemployment and Migration," CESifo Working Paper Series 2119, CESifo Group Munich.
  3. Mayr Karin & Peri Giovanni, 2009. "Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-52, November.
  4. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
  5. Alexander Haupt & Eckhard Janeba, 2004. "Education, Redistribution, and the Threat of Brain Drain," NBER Working Papers 10618, National Bureau of Economic Research, Inc.
  6. Mountford, Andrew, 1997. "Can a brain drain be good for growth in the source economy?," Journal of Development Economics, Elsevier, vol. 53(2), pages 287-303, August.
  7. Stark, Oded & Wang, Yong, 2001. "Inducing Human Capital Formation: Migration as a Substitute for Subsidies," Economics Series 100, Institute for Advanced Studies.
  8. Haupt, Alexander & Krieger, Tim & Lange, Thomas, 2010. "Competition for the International Pool of Talents : Education Policy with Student Mobility," CCES Discussion Paper Series 31, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
  9. Michel Beine & Fréderic Docquier & Hillel Rapoport, 2008. "Brain Drain and Human Capital Formation in Developing Countries: Winners and Losers," Economic Journal, Royal Economic Society, vol. 118(528), pages 631-652, 04.
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