Brain drain, informality and inequality: A search-and-matching model for sub-Saharan Africa

Frédéric Docquier and Zainab Iftikhar

Journal of International Economics, 2019, vol. 120, issue C, 109-125

Abstract: This paper revisits the effect of brain drain on development and inequality using a two-sector model with formal and informal labor markets. Contrary to existing studies, we use a search-and-matching setting that allows to endogenize the employment structure and the wage differentials between different skill groups in the same sector, and between workers with identical skills employed in different sectors. Theoretically, the brain drain induces ambiguous welfare effects for those left behind as the potential loss/gain depends on the parameters of the model. We thus parameterize our model on 33 sub-Saharan African countries and produce comparative results for each of them. We find that skilled emigration induces heterogeneous welfare losses for the low-skilled population. The size of these losses varies between 0.2 and 8%, and is influenced by the parameters of the production and education technologies. The results are fairly robust to identifying assumptions, to the inclusion of technological externalities, and to the endogenization of training decisions.

Keywords: Brain drain; Informality; Development; Inequality; Search and matching; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: F22 J24 J46 J61 O15 O17 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022199618303738
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:120:y:2019:i:c:p:109-125

DOI: 10.1016/j.jinteco.2019.05.003

Access Statistics for this article

Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and Rodríguez-Clare, Andrés

More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().