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A BRAIN GAIN OR A BRAIN DRAIN? MIGRATION, ENDOGENOUS FERTILITY, AND HUMAN CAPITAL FORMATION

Hung-Ju Chen

Economic Inquiry, 2009, vol. 47, issue 4, 766-782

Abstract: This study develops an endogenous growth model of migration to analyze the impact of international migration on the economic growth of a source country. When making their fertility and education decisions, adults may have the option of migrating to a foreign country. We find that changes in the migration probability or the extent of migration costs will lead to a trade‐off between the quality and the quantity of children. When a host country cannot differentiate between the abilities of migrants, an increase in migration probability will raise a source country’s economic growth. When low‐ and high‐skilled workers are faced with different migration probabilities, allowing more low‐skilled workers to emigrate will cause a “brain gain” in both the short run and the long run. However, relaxation of restrictions on the emigration of high‐skilled workers will damage economic growth in the long run, although a brain gain may occur in the short run.(JEL F22, J24, O15)

Date: 2009
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https://doi.org/10.1111/j.1465-7295.2008.00185.x

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