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Should I stay or should I go? An institutional approach to brain drain

  • Lea Cassar
  • Bruno S. Frey

This paper suggests that institutional factors which reward social net- works at the expenses of productivity can play an important role in ex- plaining brain drain. The e€ects of social networks on brain drain are analyzed in a decision theory framework with asymmetric information. We distinguish between the role of insidership and personal connections. The larger the cost of being an outsider, the smaller is the number and the average ability of researchers working in the domestic job market. Per- sonal connections partly compensate for this e€ect by attracting highly connected researchers back. However, starting from a world with no dis- tortions, personal connections also increase brain drain.

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Paper provided by Center for Research in Economics, Management and the Arts (CREMA) in its series CREMA Working Paper Series with number 2010-12.

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Date of creation: Jun 2010
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Handle: RePEc:cra:wpaper:2010-12
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  1. Paul Winters & Alain de Janvry & Elisabeth Sadoulet, 2001. "Family and Community Networks in Mexico-U.S. Migration," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 159-184.
  2. Katz, Eliakim & Stark, Oded, 1984. "Migration and Asymmetric Information: Comment," American Economic Review, American Economic Association, vol. 74(3), pages 533-34, June.
  3. Kwok, Peter & Leland, Hayne, 1984. "Migration and Asymmetric Information: Reply," American Economic Review, American Economic Association, vol. 74(3), pages 535, June.
  4. Kwok, Viem & Leland, Hayne, 1982. "An Economic Model of the Brain Drain," American Economic Review, American Economic Association, vol. 72(1), pages 91-100, March.
  5. Lien, Da-Hsiang Donald, 1987. "Economic analysis of brain drain," Journal of Development Economics, Elsevier, vol. 25(1), pages 33-43, February.
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