IDEAS home Printed from https://ideas.repec.org/p/ctl/louvir/2013031.html
   My bibliography  Save this paper

Brain Drain and Economic Performance in Small Island Developing States

Author

Listed:
  • David de la CROIX

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Frédéric DOCQUIER

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS)

  • Maurice SCHIFF

    (The World Bank, Development Research Group)

Abstract

Brain drain is a major issue for Small Island Developing States (SIDS). Econometric analysis confirms that smallness has a strong positive impact per se on emigration rates. On average, 50 percent of the high-skilled labour force in SIDS has left their country, and the brain drain exceeds 75 percent in a few cases. In this paper, we document this phenomenon and study the bi-directional links between brain drain and development. We show that these interdependencies can be the source of multiple equilibria and that small states are much more likely to be badly coordinated than other developing countries and settle in a bad equilibrium. The reason is that their elasticity of emigration to economic performance is larger. After calibration, we identify an important number of badly coordinated SIDS and quantify the economic costs of coordination failure. These costs may exceed 100 percent of the observed GDP per capita. Badly coordinated small states require appropriate development policies aimed at retaining or repatriating their high-skilled labour force.

Suggested Citation

  • David de la CROIX & Frédéric DOCQUIER & Maurice SCHIFF, 2013. "Brain Drain and Economic Performance in Small Island Developing States," LIDAM Discussion Papers IRES 2013031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2013031
    as

    Download full text from publisher

    File URL: http://sites.uclouvain.be/econ/DP/IRES/2013031.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. David Croix & Frédéric Docquier, 2012. "Do brain drain and poverty result from coordination failures?," Journal of Economic Growth, Springer, vol. 17(1), pages 1-26, March.
    2. Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-288, April.
    3. Daniel Cohen & Marcelo Soto, 2007. "Growth and human capital: good data, good results," Journal of Economic Growth, Springer, vol. 12(1), pages 51-76, March.
    4. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
    5. Frédéric Docquier & B. Lindsay Lowell & Abdeslam Marfouk, 2009. "A Gendered Assessment of Highly Skilled Emigration," Population and Development Review, The Population Council, Inc., vol. 35(2), pages 297-321, June.
    6. Ramón López & Maurice Schiff, 1998. "Migration and the Skill composition of the Labor Force: The Impact of Trade Liberalization in LDCs," Canadian Journal of Economics, Canadian Economics Association, vol. 31(2), pages 318-336, May.
    7. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    8. Angel de la Fuente & Rafael Doménech, 2006. "Human Capital in Growth Regressions: How Much Difference Does Data Quality Make?," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 1-36, March.
    9. Anna Mayda, 2010. "International migration: a panel data analysis of the determinants of bilateral flows," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(4), pages 1249-1274, September.
    10. Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio & Wacziarg, Romain, 2003. "Fractionalization," Journal of Economic Growth, Springer, vol. 8(2), pages 155-194, June.
    11. Ralph Rotte & Michael Vogler, 2000. "The effects of development on migration: Theoretical issues and new empirical evidence," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(3), pages 485-508.
    12. Beine, Michel & Docquier, Frédéric & Schiff, Maurice, 2008. "Brain Drain and its Determinants: A Major Issue for Small States," IZA Discussion Papers 3398, Institute of Labor Economics (IZA).
    13. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    14. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    15. 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, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Çağlar Özden & Christopher Parsons, 2016. "On the Economic Geography of International Migration," The World Economy, Wiley Blackwell, vol. 39(4), pages 478-495, April.
    2. Blanco-Álvarez, Jose & Parsons, Christopher & Tang, Sam & Wang, Yong, 2022. "Brain Refrain and Human Capital Formation in Spain," IZA Discussion Papers 15400, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Frédéric Docquier & Joël Machado & Khalid Sekkat, 2015. "Efficiency Gains from Liberalizing Labor Mobility," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 303-346, April.
    2. Beine, Michel & Docquier, Frédéric & Schiff, Maurice, 2008. "Brain Drain and its Determinants: A Major Issue for Small States," IZA Discussion Papers 3398, Institute of Labor Economics (IZA).
    3. Artuc, Erhan & Docquier, Frédéric & Özden, Çaglar & Parsons, Christopher, 2015. "A Global Assessment of Human Capital Mobility: The Role of Non-OECD Destinations," World Development, Elsevier, vol. 65(C), pages 6-26.
    4. Beine, Michel & Docquier, Frédéric & Oden-Defoort, Cecily, 2011. "A Panel Data Analysis of the Brain Gain," World Development, Elsevier, vol. 39(4), pages 523-532, April.
    5. Abdeslam Marfouk, 2007. "Brain Drain in Developing Countries," The World Bank Economic Review, World Bank, vol. 21(2), pages 193-218, June.
    6. Vasilakis, Chrysovalantis, 2013. "Globalized Market for Talents and Inequality: What Can Be Learnt from European Football?," Economic Research Papers 270425, University of Warwick - Department of Economics.
    7. Francesc Ortega & Giovanni Peri, 2016. "Openness and income: The roles of trade and migration," World Scientific Book Chapters, in: The Economics of International Migration, chapter 10, pages 309-329, World Scientific Publishing Co. Pte. Ltd..
    8. Vasilakis, Chrysovalantis, 2017. "Does talent migration increase inequality? A quantitative assessment in football labour market," Journal of Economic Dynamics and Control, Elsevier, vol. 85(C), pages 150-166.
    9. Luca Marchiori & I-Ling Shen & Frédéric Docquier, 2013. "Brain Drain In Globalization: A General Equilibrium Analysis From The Sending Countries' Perspective," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1582-1602, April.
    10. Simone Bertoli & Hillel Rapoport, 2015. "Heaven's Swing Door: Endogenous Skills, Migration Networks, and the Effectiveness of Quality-Selective Immigration Policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 565-591, April.
    11. ?gel de la Fuente, "undated". "Convergence Across Countries And Regions: Theory And Empirics," UFAE and IAE Working Papers 447.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    12. Xu Xu & Kevin Sylwester, 2016. "Environmental Quality and International Migration," Kyklos, Wiley Blackwell, vol. 69(1), pages 157-180, February.
    13. Frédéric Docquier & Hillel Rapoport, 2012. "Globalization, Brain Drain, and Development," Journal of Economic Literature, American Economic Association, vol. 50(3), pages 681-730, September.
    14. Christian Dreger & Georg Erber & Daniela Glocker, 2008. "Regional Measures of Human Capital in the European Union," SOEPpapers on Multidisciplinary Panel Data Research 137, DIW Berlin, The German Socio-Economic Panel (SOEP).
    15. Marcén, Miriam & Bellido, Héctor, 2015. "Spaniards in the wider World," MPRA Paper 63966, University Library of Munich, Germany.
    16. Frederic DOCQUIER & Çaglar OZDEN & Giovanni PERI, 2010. "The Wage Effects of Immigration and Emigration," LIDAM Discussion Papers IRES 2010044, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    17. Antwi, James & Phillips, David C., 2013. "Wages and health worker retention: Evidence from public sector wage reforms in Ghana," Journal of Development Economics, Elsevier, vol. 102(C), pages 101-115.
    18. Jérôme Vandenbussche & Philippe Aghion & Costas Meghir, 2006. "Growth, distance to frontier and composition of human capital," Journal of Economic Growth, Springer, vol. 11(2), pages 97-127, June.
    19. Claude DIEBOLT & Ralph HIPPE, 2017. "Regional human capital inequality in Europe in the long run, 1850-2010," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 45, pages 5-30.
    20. Drivas, Kyriakos & Economidou, Claire & Karamanis, Dimitrios & Sanders, Mark, 2020. "Mobility of highly skilled individuals and local innovation activity," Technological Forecasting and Social Change, Elsevier, vol. 158(C).

    More about this item

    Keywords

    Brain drain; development; small island developing states; coordination failure;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ctl:louvir:2013031. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Virginie LEBLANC (email available below). General contact details of provider: https://edirc.repec.org/data/iruclbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.