Brain Drain in Globalization: A General Equilibrium Analysis from the Sending Countries' Perspective

21 Pages Posted: 27 Feb 2013

See all articles by Luca Marchiori

Luca Marchiori

Catholic University of Louvain (UCL); Universite du Luxembourg

I-Ling Shen

affiliation not provided to SSRN

Frédéric Docquier

Université catholique de Louvain; CREAM, Centre for Research on Environmental Appraisal & Management, UK; IZA Institute of Labor Economics

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Date Written: April 2013

Abstract

According to the economic literature, high‐skilled emigration may either harm or benefit developing economies. Recent research highlighted several positive and negative channels through which the brain drain operates. This paper aims at evaluating the relative magnitudes of various brain drain channels and quantifying their global impact on migrants' sending countries. For this purpose, we develop a 10‐region general equilibrium model of the world economy characterized by overlapping‐generations dynamics. Our findings suggest that the short‐run impact of brain drain on resident human capital is extremely crucial, as it affects not only the number of high‐skilled workers available to domestic production, but also the sending economy's capacity to innovate/adopt modern technologies. This latter effect is particularly important in globalization, where capital investments are made in places with high production efficiencies. Hence, despite positive feedback effects, those countries facing prevalent high‐skilled emigration are the most candid victims to brain drain.

JEL Classification: F22, J24, O57

Suggested Citation

Marchiori, Luca and Shen, I-Ling and Docquier, Frédéric, Brain Drain in Globalization: A General Equilibrium Analysis from the Sending Countries' Perspective (April 2013). Economic Inquiry, Vol. 51, Issue 2, pp. 1582-1602, 2013. Available at SSRN: https://ssrn.com/abstract=2225698 or http://dx.doi.org/10.1111/j.1465-7295.2012.00492.x

Luca Marchiori (Contact Author)

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

Universite du Luxembourg

L-1511 Luxembourg
Luxembourg

I-Ling Shen

affiliation not provided to SSRN

No Address Available

Frédéric Docquier

Université catholique de Louvain ( email )

IRES
Place Montesquieu 3
Louvain-la-Neuve, 1348
Belgium

HOME PAGE: http://https://perso.uclouvain.be/frederic.docquier/

CREAM, Centre for Research on Environmental Appraisal & Management, UK

University of Newcastle
NE1 7RU Newcastle Upon Tyne
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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