The Fatal Consequences of Brain Drain

Samuel Dodini, Katrine V. Loken (), Petter Lundborg () and Alexander Willen ()

No 2528, Working Papers from Federal Reserve Bank of Dallas

Abstract: We examine the welfare consequences of reallocating high-skilled labor across national borders. A labor demand shock in Norway—driven by a surge in oil prices—substantially increased physician wages and sharply raised the incentive for Swedish doctors to commute across the border. Leveraging linked administrative data across the two countries and a difference-in-differences design, we show that this shift doubled commuting rates and significantly reduced Sweden’s domestic physician supply. The result was a persistent rise in mortality in Sweden, with no corresponding health gains in Norway. These effects were unevenly distributed, disproportionately harming certain places and populations. The underlying mechanism was a severe strain on Sweden’s healthcare system: shortages of high-skilled generalists led to more hospitalizations, premature discharges and higher readmission rates. Mortality effects were larger in low-density physician regions and concentrated in older individuals and acute conditions.

Keywords: brain drain; worker mobility; mortality (search for similar items in EconPapers)
JEL-codes: H1 J2 J6 (search for similar items in EconPapers)
Pages: 71
Date: 2025-08-04
New Economics Papers: this item is included in nep-dem, nep-hea and nep-lab
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Related works:
Working Paper: The Fatal Consequences of Brain Drain (2025)
Working Paper: The Fatal Consequences of Brain Drain (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddwp:101405

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DOI: 10.24149/wp2528

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