Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/140802
Authors: 
Stark, Oded
Fan, C. Simon
Year of Publication: 
2007
Series/Report no.: 
CMR Working Papers 18/76
Abstract: 
Extending both the 'harmful brain drain' literature and the 'beneficial brain drain' literature, this paper analyzes both the negative and the positive impact of migration by skilled individuals in a unified framework. The paper extends the received literature on the 'harmful brain drain' by showing that in the short run, international migration can result in 'educated unemployment' and overeducation in developing countries, as well as a brain drain from these countries. A simulation suggests that the costs of 'educated unemployment' and overeducation can amount to significant losses for the individuals concerned, who may constitute a substantial proportion of the educated individuals. Adopting a dynamic framework, it is then shown that due to the positive externality of the prevailing, economy-wide endowment of human capital on the formation of human capital, a relaxation in migration policy in both the current period and the preceding period can facilitate 'take-off' of a developing country in the current period. Thus, it is suggested that while a controlled migration of educated individuals may reduce the social welfare of those who stay behind in the short run, it improves it in the long run.
Subjects: 
Brain drain
Human capital formation
'Educated unemployment'
Overeducation
Social welfare
JEL: 
F22
I30
J24
J61
J64
O15
Document Type: 
Working Paper

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