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Brain drain in globalization A general equilibrium analysis from the sending countries’ perspective



    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and UNIVERSITY OF LUXEMBOURG, Faculty of Law, Economics and Finance)

  • I-Ling SHEN

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES), UNIVERSITY OF GENEVA, Department of Econometrics and Institute for the Study of Labor (IZA))

  • Frederic DOCQUIER

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES), Belgian National Fund of Scientific Research and Institute for the Study of Labor (IZA))


The paper assesses the global effects of brain drain on developing economies and quantifies the relative sizes of various static and dynamic impacts. By constructing a unified generic framework characterized by overlapping generations dynamics and calibrated to real data, this study incorporates many direct impacts of brain drain whose interactions, along with other indirect effects, are endogenously and dynamically generated. Our findings suggest that the short-run impact of brain drain on resident human capital is extremely crucial, as it does not only determine the number of skilled workers available to domestic production, but it also affects the sending economy’s capacity to innovate or to adopt modern technologies. The latter impact plays an important role particularly in a globalized economy where capital investments are made in places with higher production efficiencies ceteris paribus. Hence, in spite of several empirically documented positive feedback effects, those countries with high skilled emigration rates are the most candid victims to brain drain since they are least likely to benefit from the “brain gain” effect, and thus suffering from declines of their resident human capital.

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  • Luca MARCHIORI & I-Ling SHEN & Frederic DOCQUIER, 2009. "Brain drain in globalization A general equilibrium analysis from the sending countries’ perspective," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2009013, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2009013

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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Duarte Leite & Óscar Afonso & Sandra Silva, 2014. "A tale of two countries: a directed technical change approach," FEP Working Papers 539, Universidade do Porto, Faculdade de Economia do Porto.
    3. Nejad, Maryam Naghsh & Young, Andrew T., 2016. "Want freedom, will travel: Emigrant self-selection according to institutional quality," European Journal of Political Economy, Elsevier, vol. 45(S), pages 71-84.
    4. Bennett, Daniel & Nikolaev, Boris & Aidt, Toke, 2016. "Institutions & Well-being," MPRA Paper 78436, University Library of Munich, Germany.
    5. Zhang, Yi & Matz, Julia Anna, 2017. "On the train to brain gain in rural China," Discussion Papers 252443, University of Bonn, Center for Development Research (ZEF).
    6. Vladimir Borgy & Xavier Chojnicki & Gilles Le Garrec & Cyrille Schwellnus, 2010. "Macroeconomic Consequences of Global Endogenous Migration: a General Equilibrium Analysis," Annals of Economics and Statistics, GENES, issue 97-98, pages 13-39.
    7. Andrea Caragliu & Peter Nijkamp, 2013. "From Islands to Hubs of Innovation: Connecting Innovative Regions," Tinbergen Institute Discussion Papers 13-141/VIII, Tinbergen Institute.
    8. Ted Davis & David M. Hart, 2010. "International Cooperation to Manage High-Skill Migration: The Case of India-U.S. Relations," Review of Policy Research, Policy Studies Organization, vol. 27(4), pages 509-526, July.
    9. Docquier, Frédéric & Marchiori, Luca, 2012. "The impact of MENA-to-EU migration in the context of demographic change," Journal of Pension Economics and Finance, Cambridge University Press, vol. 11(02), pages 243-284, April.
    10. Kouni, Mohamed, 2016. "Medical Brain Drain and Life Expectancy: A Comparative Analysis between Arab, American and Asian Countries," MPRA Paper 78321, University Library of Munich, Germany.
    11. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, Elsevier.
    12. Ratha, Dilip & Mohapatra, Sanket & Scheja, Elina, 2011. "Impact of migration on economic and social development : a review of evidence and emerging issues," Policy Research Working Paper Series 5558, The World Bank.
    13. Okoye, Dozie, 2016. "Can brain drain be good for human capital growth? Evidence from cross-country skill premiums and education costs," Economic Analysis and Policy, Elsevier, vol. 49(C), pages 74-99.
    14. Arends-Kuenning, Mary P. & Calara, Alvaro & Go, Stella, 2015. "International Migration Opportunities and Occupational Choice: A Case Study of Philippine Nurses 2002 to 2014," IZA Discussion Papers 8881, Institute for the Study of Labor (IZA).
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    More about this item


    Brain Drain; Capital Flow; Development; Human Capital; Remittances;

    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
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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