The Brain Drain and the World Distribution of Income and Population

Abstract

This paper models the evolution of the world distribution of income and shows that while the distribution of income per capita across economies in the world will be stable in the long run, the world distribution of population may be divergent. The paper then uses this model to analyze the impact of the current trend towards predominantly skilled emigration from poor to rich countries on fertility, human capital formation, and growth, in both the sending and receiving countries. It shows that in the long run, brain drain migration patterns may increase world inequality as relatively poor countries grow large in terms of population. In the short run however, it is possible for world inequality to fall due to rises in GDP per capita in large developing economies with low skilled emigration rates.

Keywords: Migration, Growth, Brain Drain, World Distribution of Income

JEL Classification: O40, F11, F43