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Do Brain Drain and Poverty Result from Coordination Failures?

Author

Listed:
  • David DE LA CROIX

    (IRES and CORE, UCLouvain)

  • Frederic DOCQUIER

    (National Fund for Scientific Research (Belgium) and IRES, UCLouvain)

Abstract

We explore the complementarities between high-skill emigration and poverty in developing countries. We build a model endogenizing human-capital accumulation, high-skill migration and productivity. Two countries sharing the same characteristics may end up either in a “low poverty/low brain drain” path or in a “high poverty/high brain drain” path. After identifying country-specific parameters, we find that, for a majority of countries, the observed equilibrium has higher income than the other possible one. In 22 developing countries (including 20 small states with less than 2 million inhabitants), poverty and high brain drain are worsened by a coordination failure. For 25 other countries, a radical worsening of economic performances is feasible. These results are fairly robust to identification assumptions and the inclusion of a brain-gain mechanism.

Suggested Citation

  • David DE LA CROIX & Frederic DOCQUIER, 2010. "Do Brain Drain and Poverty Result from Coordination Failures?," LIDAM Discussion Papers IRES 2010016, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2010016
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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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