IDEAS home Printed from
   My bibliography  Save this paper

Brain Drain or Brain Exchange?


  • Hayden Glass
  • Wai Kin Choy

    () (Hayden Glass, Law and Economics Consulting Group
    Wai Kin Choy, New Zealand Treasury)


This paper explores the “brain drain” hypothesis – the idea that New Zealand is losing many of its most talented citizens to other countries. We conclude that we are experiencing more of a brain exchange than a brain drain. There have been net outflows of New Zealand citizens for forty years, and we have been replacing those leaving with non-New Zealand citizens. On the basis of the data available, our immigrants appear to be more skilled than our emigrants (and than our general population). But there may be some cause for concern if immigrants cannot get jobs to make use of their skills. Migration flows to and from Australia are different from those with the rest of the world. New Zealand consistently loses its citizens to Australia, but they are not just the highest skilled. Instead, they are representative of the general population of New Zealand. That is, there is no brain drain to Australia either, but what might be called a “same drain”. This is likely to be a consequence of the common labour market. Policy responses could focus on both outflows and inflows. Limited policy levers exist for attracting and retaining New Zealand citizens within the country, other than making the country a more attractive place to work, and live. The key policy issue for inflows is the improvement of the selection, settlement, and integration of immigrants. The paper ends by calling for a more sophisticated debate on immigration and emigration, and a more accurate conception of what will be an ongoing trend – that is, the increasingly free flow of people (including New Zealanders), around the globe.

Suggested Citation

  • Hayden Glass & Wai Kin Choy, 2001. "Brain Drain or Brain Exchange?," Treasury Working Paper Series 01/22, New Zealand Treasury.
  • Handle: RePEc:nzt:nztwps:01/22

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Brosnan, Peter & Poot, Jacques, 1987. "Modelling the Determinants of Trans-Tasman Migration after World War II," The Economic Record, The Economic Society of Australia, vol. 63(183), pages 313-329, December.
    2. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A brain gain with a brain drain," Economics Letters, Elsevier, vol. 55(2), pages 227-234, August.
    3. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    4. Winkelmann, Rainer, 2000. "Immigration Policies and their Impact: The Case of New Zealand and Australia," IZA Discussion Papers 169, Institute for the Study of Labor (IZA).
    5. Peter Bushnell & Wai Kin Choy, 2001. ""Go West, Young Man, Go West!"?," Treasury Working Paper Series 01/07, New Zealand Treasury.
    6. 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.
    7. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins of Technology-Skill Complementarity," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 693-732.
    8. Bhagwati, Jagdish & Hamada, Koichi, 1974. "The brain drain, international integration of markets for professionals and unemployment : A theoretical analysis," Journal of Development Economics, Elsevier, vol. 1(1), pages 19-42, April.
    9. Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57.
    Full references (including those not matched with items on IDEAS)


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

    Cited by:

    1. Wai Kin Choy & David C Mare & Peter Mawson, 2002. "Modelling Regional Labour Market Adjustment in New Zealand," Treasury Working Paper Series 02/01, New Zealand Treasury.
    2. David C. Maré & Jason Timmins, 2003. "Moving to Jobs?," Working Papers 03_07, Motu Economic and Public Policy Research.
    3. Davenport, Sally, 2004. "Panic and panacea: brain drain and science and technology human capital policy," Research Policy, Elsevier, vol. 33(4), pages 617-630, May.
    4. Myers, Barbara & Pringle, Judith K., 2005. "Self-initiated foreign experience as accelerated development: Influences of gender," Journal of World Business, Elsevier, vol. 40(4), pages 421-431, November.
    5. Nils Bjorksten, 2001. "The current state of New Zealand monetary union research," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 64, December.

    More about this item


    International migration; brain drain;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    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:nzt:nztwps:01/22. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Web and Publishing Team, The Treasury). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.