Return Migration as a Channel of Brain Gain

52 Pages Posted: 2 Jun 2008 Last revised: 3 Jun 2008

See all articles by Karin Mayr

Karin Mayr

University of Linz - Department of Economics

Giovanni Peri

University of California, Davis - Department of Economics

Date Written: May 2008

Abstract

Recent theoretical and empirical studies have emphasized the fact that the prospect of international migration increases the expected returns to skills in poor countries, linking the possibility of migrating (brain drain) with incentives to higher education (brain gain). If emigration is uncertain and some of the highly educated remain, such a channel may, at least in part, counterbalance the negative effects of brain drain. Moreover, recent empirical evidence seems to show that temporary migration is widespread among highly skilled migrants (such as Eastern Europeans in Western Europe and Asians in the U.S.). This paper develops a simple tractable overlapping generations model that provides an economic rationale for return migration and which predicts who will migrate and who will return among agents with heterogeneous abilities. We use parameter values from the literature and the data on return migration to simulate the model and quantify the effects of increased openness on human capital and wages of the sending countries. We find that, for plausible values of the parameters, the return migration channel is very important and combined with the incentive channel reverses the brain drain into significant brain gain for the sending country.

Suggested Citation

Mayr, Karin and Peri, Giovanni, Return Migration as a Channel of Brain Gain (May 2008). NBER Working Paper No. w14039. Available at SSRN: https://ssrn.com/abstract=1139355

Karin Mayr

University of Linz - Department of Economics ( email )

Altenbergerstr. 69
A-4040 Linz, Uper Austria 4040
Austria

Giovanni Peri (Contact Author)

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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