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Brain Drain, Brain Gain, and Economic Growth in China

  • Ha, Wei
  • Yi, Junjian
  • Zhang, Junsen

This paper examines the effects of both permanent and temporary emigration on human capital formation and economic growth of the source regions. To achieve this end, this paper explores the Chinese provincial panel data from 1980 to 2005. First, the fixed effects model is employed to estimate the effect of emigration on school enrollment rates in the source regions. Relative to this aspect, we find that the magnitude (scale) of permanent emigrants (measured by the permanent emigration ratio) is conducive to the improvement of both middle and high schools enrollments. In contrast, the magnitude of temporary emigrants has a significantly positive effect on middle school enrollment but does not have a significant effect on high school enrollment. More interestingly, different educational attainments of temporary emigrants have different effects on school enrollment. Specifically, the share of temporary emigrants with high school education positively affects middle school enrollment, while the share of temporary emigrants with middle school education negatively affects high school enrollment. Second, the instrumental variable method is applied to estimate the effect of emigration on economic growth within the framework of system Generalized Method of Moments (GMM). The estimation results suggest that both permanent and temporary emigrations have a detrimental effect on the economic growth of the source regions. Our empirical tests provide some new evidence to the "brain drain" debate, which has recently received increasing attention.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 19221.

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Date of creation: 01 Aug 2009
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Handle: RePEc:pra:mprapa:19221
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  1. Bond, Stephen Roy & Hoeffler, Anke & Temple, Jonathan, 2001. "GMM Estimation of Empirical Growth Models," CEPR Discussion Papers 3048, C.E.P.R. Discussion Papers.
  2. Stephen Bond & Anke Hoeffler, 2001. "GMM Estimation of Empirical Growth Models," Economics Series Working Papers 2001-W21, University of Oxford, Department of Economics.
  3. Docquier, Frédéric & Rapoport, Hillel, 2007. "Skilled Migration: The Perspective of Developing Countries," IZA Discussion Papers 2873, Institute for the Study of Labor (IZA).
  4. Knight, John & Song, Lina, 1999. "The Rural-Urban Divide: Economic Disparities and Interactions in China," OUP Catalogue, Oxford University Press, number 9780198293309, June.
  5. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
  6. Shahid Yusuf & Tony Saich, 2008. "China Urbanizes : Consequences, Strategies, and Policies," World Bank Publications, The World Bank, number 6337, August.
  7. Galor, Oded, 1996. "Convergence? Inferences from Theoretical Models," Economic Journal, Royal Economic Society, vol. 106(437), pages 1056-69, July.
  8. Karin Mayr & Giovanni Peri, 2008. "Return Migration as Channel of Brain Gain," CReAM Discussion Paper Series 0804, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  9. Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
  10. Di Maria, Corrado & Stryszowski, Piotr, 2009. "Migration, human capital accumulation and economic development," Journal of Development Economics, Elsevier, vol. 90(2), pages 306-313, November.
  11. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 1127-1170.
  12. 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.
  13. Beine, Michel & Docquier, Frédéric & Rapoport, Hillel, 2003. "Brain Drain and LDCs' Growth: Winners and Losers," IZA Discussion Papers 819, Institute for the Study of Labor (IZA).
  14. Zhang, Junsen & Zhao, Yaohui & Park, Albert & Song, Xiaoqing, 2005. "Economic returns to schooling in urban China, 1988 to 2001," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 730-752, December.
  15. Michel, BEINE & Frédéric, DOCQUIER & Hillel, RAPOPORT, 2006. "Brain drain and human capital formation in developing countries : winners and losers," Discussion Papers (ECON - Département des Sciences Economiques) 2006023, Université catholique de Louvain, Département des Sciences Economiques.
  16. 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.
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