The political economy of brain drain

Theocharis Grigoriadis and Dmitriy Veselov

No 2026/17, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: This paper develops a political-economy game of skilled exit, redistribution, repression, and regime survival. Skilled workers are economically valuable because they become entrepreneurs, pay taxes, and generate productive externalities for low-skilled workers. They are also politically dangerous because they can enter political competition in democracy, participate in revolution- ary collective action in autocracy, or leave the country altogether. Governments therefore face a strategic tradeoff. Retaining skilled citizens raises output and fiscal capacity, but it can also increase electoral or revolutionary pressure. Allowing skilled citizens to leave weakens development, but it may relax the incumbent's political constraint. In democracy, redistribution toward the low-skilled majority lowers the return to skilled entrepreneurship and can induce exit. In autocracy, exit barriers and repression are alternative technologies of political survival: hard dictatorships can restrict exit and extract from skilled workers, while soft dictatorships may tolerate emigration because it reduces the pool of potential protesters. We characterize this logic in a one-shot benchmark and a dynamic extension with persistent brain drain and absorbing political turnover. We also allow repression costs to rise with the human-capital intensity of the economy, so that repression becomes more destructive precisely when skilled labor is more productive. The model yields a comparative regime logic of skilled exit: emigration is highest where exit directly relaxes the incumbent's political constraint, as in soft dictatorship, or where redistribution lowers the domestic return to skilled entrepreneurship, as in redistributive democracy; it is lower in elitist democracy and lowest in hard dictatorship.

Keywords: brain drain; migration; democracy; dictatorship; redistribution; repression; political competition; revolution; institutions (search for similar items in EconPapers)
JEL-codes: D72 D73 D78 F22 J24 O15 P16 P26 P48 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/342530/1/1975348001.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:342530

DOI: 10.17169/refubium-52639

Access Statistics for this paper

More papers in Discussion Papers from Free University Berlin, School of Business & Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().