Brain Drain or Brain Gain? International labor mobility and human capital formation

Anelí Bongers, Carmen Diaz-Roldan and Jose Torres ()

No 2018-09, Working Papers from Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center

Abstract: This paper studies the impact of international labor migration on human capital investment in both destination and origin countries using an integrated theoretical framework. We develop a two-country Dynamic Stochastic General Equilibrium human capital investment model with international labor mobility, in which both decision to migrate and to invest in skill acquisition are endogenous. We show that human capital formation process in the countries of origin is very sensible to migration policies implemented by destination countries. Our results show that human capital accumulation in the country of origin is encouraged by the possibility of emigration to higher labor productivity countries, supporting the recent view of the "brain gain" hypothesis. Productivity shocks hitting the destination country reduces human capital investment by natives but increase human capital investment in the country of origin when migration is allowed. Finally, we ?nd that migration increases world human capital, increasing the stock of human capital in both destination and origin countries.

JEL-codes: F22 J24 J61 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2018-12
New Economics Papers: this item is included in nep-dge and nep-int
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https://theeconomics.uma.es/malagawpseries/Papers/METCwp2018-9.pdf First version, 2018 (application/pdf)

Related works:
Journal Article: Brain drain or brain gain? International labor mobility and human capital formation (2022)
Working Paper: Brain Drain or Brain Gain? International labor mobility and human capital formation (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:mal:wpaper:2018-9

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