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The Brain Drain: Curse or Boon?

  • Commander, Simon


    (IE Business School, Altura Partners)

  • Kangasniemi, Mari


    (London School of Economics)

  • Winters, L. Alan


    (University of Sussex)

The migration of skilled individuals from developing countries has typically been considered to be costly for the sending country, due to lost investments in education, high fiscal costs and labour market distortions. Economic theory, however, raises the possibility of a beneficial brain drain primarily through improved incentives to acquire human capital. Our survey of empirical and theoretical work shows under what circumstances a developing country can benefit from skilled migration. It argues that the sectoral aspects of migration and screening of migrants in the receiving country are of major importance in determining the welfare implications of the brain drain. These issues, as well as the size of the sending country, duration of migration and the effect of diaspora populations, should be addressed in future empirical work on skilled migration. JEL

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 809.

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Length: 38 pages
Date of creation: Jun 2003
Date of revision:
Publication status: published in: R. Baldwin and L. A. Winters (eds.), Challenges to Globalisation. NBER and University of Chicago Press, 2004
Handle: RePEc:iza:izadps:dp809
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  1. 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.
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  17. 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.
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  19. Rodriguez, Carlos Alfredo, 1975. "Brain drain and economic growth : A dynamic model," Journal of Development Economics, Elsevier, vol. 2(3), pages 223-247, September.
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  22. Guillermina Jasso & Douglas Massey & Mark Rosenzweig & James Smith, 2000. "The new immigrant survey pilot (NIS-P): Overview and new findings about U.S. Legal immigrants at admission," Demography, Springer, vol. 37(1), pages 127-138, February.
  23. David Ulph & L. Alan Winters, 1994. "Strategic Manpower Policy and International Trade," NBER Chapters, in: Empirical Studies of Strategic Trade Policy, pages 157-194 National Bureau of Economic Research, Inc.
  24. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  25. Ilahi, Nadeem, 1999. "Return Migration and Occupational Change," Review of Development Economics, Wiley Blackwell, vol. 3(2), pages 170-86, June.
  26. John Salt, 1997. "International Movements of the Highly Skilled," OECD Social, Employment and Migration Working Papers 3, OECD Publishing.
  27. McCormick, Barry & Wahba, Jackline, 2001. "Overseas Work Experience, Savings and Entrepreneurship amongst Return Migrants to LDCs," Scottish Journal of Political Economy, Scottish Economic Society, vol. 48(2), pages 164-78, May.
  28. McCulloch, Rachel & Yellen, Janet L., 1975. "Consequences of a tax on the brain drain for unemployment and income inequality in less developed countries," Journal of Development Economics, Elsevier, vol. 2(3), pages 249-264, September.
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