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Migration, Human Capital, Brain Drain and Gain -A Perspective in Light of the EU’s Experience-

Robert F. Owen

Economic Analysis, 2017, vol. 196, 200-236

Abstract: The interdependence between migration, human capital formation and countries’ economic welfare via, notably, brain drain and gain effects, is examined, while highlighting certain key features from the experience of the European Union. First, a broad empirical overview of trends in international migration since 1980 is offered for EU countries, in comparison with patterns in certain other major developed countries, including Japan and the United States. In addition to the hypothetical structural changes arising from enhanced intra-EU labor mobility under the Schengen Agreement, another distinctive feature of the European experience has been a marked build-up in the importance of Erasmus student mobility. Associated trends and imbalances across countries are identified. A more summary presentation of empirical findings and methodological insights, based on an empirical investigation relating to the inter-regional labor mobility of recently graduated French workers, is also provided. This micro-econometric analysis uses Probit models, corrected for selection bias, when examining both micro and macro-economic determinants of the mobility of recent graduates across French regions. Findings suggest that educational attainment influences job offers directly, as well as, indirectly, through heightened geographical mobility. In this regard, a strong, but non-linear, link between education and spatial mobility is identified. A welfare analysis emphasizes how human capital “quality” can impact the evaluation of migration effects, while proposing an approach for calculating imputed welfare effects of interregional mobility. A subsequent conceptual framework is proposed for understanding how heterogeneous abilities and initial national levels of educational attainment, along with differences in the quality of higher educational systems and associated access conditions, critically co-determine individuals’ international educational choices and their related, subsequent professional options. Associated implications for national economic welfare are outlined. An array of factors in shown to potentially determine students’ decisions whether to be trained and/or work at home, or abroad. These include the quality and pricing of educational offerings, the openness, specificity and selectivity of university systems, international salary differentials and foreign job market access conditions. Self-selection on the part of heterogeneous individuals is a key element determining the balance between brain drain and brain gain effects, along with the relative efficacy of countries’ optimal educational policies, aimed at attracting international talent. JEL Classification Codes: F22, D82, I25, I28, J24

Keywords: human capital; brain gain; brain drain; international migration; labor markets; European Union; international educational choices and policies; heterogeneous agents; self-selection (search for similar items in EconPapers)
Date: 2017
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