Institutional Impact of Brain Drain, Human Capital, and Inequality: A Political Economy Analysis

Maurice Schiff and Frédéric Docquier

Latin American Journal of Economics-formerly Cuadernos de Economía, 2016, vol. 53, issue 1, 95-110

Abstract: This paper uses an "exit and voice" political economy model to examine the institutional impact of brain drain, human capital, and inequality. Some of the main findings are: 1) the impact of brain drain m on institutional quality is U-shaped, with a maximum at m = 0; 2) the institutional impact of human capital h is U-shaped; 3) the likelihood that institutions will improve with m (h) is inversely related to international (domestic) inequality. Thus, the prospect that institutions will improve with human capital is likely to be small in SSA and LAC, where income inequality is substantially higher than in East Asia.

Keywords: human capital; brain drain; inequality; institutional impact; political economy (search for similar items in EconPapers)
JEL-codes: D33 F22 I24 I25 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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