Brain Gain: Claims about Its Size and Impact on Welfare and Growth Are Greatly Exaggerated

Maurice Schiff

No 1599, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Based on static partial equilibrium analysis, the "new brain drain" literature argues that, by raising the return to education, a brain drain generates a brain gain that is, under certain conditions, larger than the brain drain itself, and that such a net brain gain results in an increase in welfare and growth due to education's positive externalities. This paper, on the other hand, argues that these claims are exaggerated. In the static case, and based on both partial and general equilibrium considerations, the paper shows that i) the size of the brain gain is smaller than suggested in that literature; ii) the impact on welfare and growth is smaller as well (for any brain gain size); iii) a positive brain gain is likely to result in a smaller human capital gain and may even have a negative impact on the stock of human capital; iv) an increase in the stock of human capital may have a negative impact on welfare and growth; and v) in a dynamic framework, the paper shows that the brain drain is unambiguously larger than the brain gain, i.e., that the steady state is characterized by a net brain loss.

Keywords: exaggerated claims; growth; welfare; brain gain size (search for similar items in EconPapers)
JEL-codes: D61 D62 F22 H20 H41 I12 J61 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2005-05
New Economics Papers: this item is included in nep-edu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (55)

Published - published in: Caglar Ozden and Maurice Schiff (eds.), International Migration, Remittances, and the Brain Drain, Palgrave MacMillan: New York, 2006

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Working Paper: Brain gain: claims about its size and impact on welfare and growth are greatly exaggerated (2005)
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