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Ability Drain: Size, Impact, and Comparison with Brain Drain under Alternative Immigration Policies

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  • Schiff, Maurice

Abstract

Ability drain's (AD) impact seems economically significant, with 30% of US Nobel laureates since 1906 being immigrants, and immigrants or their children founding 40% of Fortune 500 companies. Nonetheless, while brain drain (BD) and gain (BG) have been studied extensively, AD has not. I examine migration's impact on ability (a), education (h), and productive human capital or 'skill' s=s(a,h), for source country residents and migrants under a) the points system (PS) which accounts for h, and b) the 'vetting' system (VS) which accounts for s (e.g., US H-1B program). Findings are: i) Migration reduces (raises) residents' (migrants') average ability, with an ambiguous (positive) impact on average education and skill, and net skill drain, SD, likelier than net BD; ii) these effects increase with ability's inequality or variance, are greater under VS than PS, and hurt source countries; iii) the model and two empirical studies suggest that, for educated US immigrants, average AD ≥ BD, with real income about twice home country income; iv) SD holds for any BD, and also for a very small AD (7.4% of our estimate). Policy implications are provided.

Suggested Citation

  • Schiff, Maurice, 2017. "Ability Drain: Size, Impact, and Comparison with Brain Drain under Alternative Immigration Policies," GLO Discussion Paper Series 62, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:62
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    References listed on IDEAS

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    Cited by:

    1. Schiff, Maurice, 2018. "Beneficial Brain Drain and Non-Migrants' Welfare," IZA Discussion Papers 11483, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Migration; points system; vetting system; ability drain; brain drain; brain gain;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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