Skilled migration and growth. Testing brain drain and brain gain theories

José Groizard and Joan Llull

No 20, DEA Working Papers from Universitat de les Illes Balears, Departament d'Economía Aplicada

Abstract: The economic effects of the migration of skilled workers from developing countries are highly controversial in the theoretical literature. Traditional models on the brain drain phenomenon stress the negative impact on growth, while new models introduce the possibility of a brain gain for labor exporting economies through indirect channels (i.e. increased incentives for those individuals left behind to accumulate human capital), or direct channels (such as remittances, return migration or FDI and trade linkages). Using a new dataset on the educational level of the migration workforce into the OECD, we test the hypothesis of brain gain estimating a growth equation and a human capital equation. We reject the hypothesis of brain gain in all the cases. The results confirm that countries which export high skilled labor to rich economies tend to have a lower level of human capital and, hence, worse economic performance.

Keywords: Human capital formation; international migration; skilled workers; development; source country effects; instrumental variables. (search for similar items in EconPapers)
JEL-codes: C30 F22 J24 O15 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-dev, nep-hrm and nep-int
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ubi:deawps:20

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