Return Migration as Channel of Brain Gain

Karin Mayr () and Giovanni Peri ()

No 804, CReAM Discussion Paper Series from Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London

Abstract: Recent theoretical and empirical studies have emphasized the fact that the prospect of international migration increases the expected returns to skills in poor countries, linking the possibility of migrating (brain drain) with incentives to higher education (brain gain). If emigration is uncertain and some of the highly educated remain, such a channel may, at least in part, counterbalance the negative effects of brain drain. Moreover, recent empirical evidence seems to show that temporary migration is widespread among highly skilled migrants (such as Eastern Europeans inWestern Europe and Asians in the U.S.). This paper develops a simple tractable overlapping generations model that provides an economic rationale for return migration and which predicts who will migrate and who will return among agents with heterogeneous abilities. We use parameter values from the literature and the data on return migration to calibrate our model and simulate and quantify the effects of increased openness on human capital and wages of the sending countries. We find that, for plausible values of the parameters, the return migration channel is very important and combined with the incentive channel reverses the brain drain into significant brain gain for the sending country.

Keywords: Skilled Migration; Return Migration; Returns to Education. (search for similar items in EconPapers)
JEL-codes: F22 J61 O15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-dge, nep-hrm, nep-lab and nep-mig
Date: Written
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Related works:
Working Paper: Return Migration as a Channel of Brain Gain (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:crm:wpaper:0804

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