Revisiting the Brain Drain Literature with Insights from a Dynamic General Equilibrium World Model

17 Pages Posted: 14 Apr 2016

See all articles by Elisabetta Lodigiani

Elisabetta Lodigiani

Ca Foscari University of Venice; University of Milan; University of Milan - Centro Studi Luca d'Agliano (LdA)

Luca Marchiori

Banque Centrale du Luxembourg

I‐Ling Shen

South Coast Air Quality Management District (SCAQMD)

Date Written: April 2016

Abstract

The existing brain drain literature has found various mechanisms through which the high‐skilled South‐to‐North migration affects developing economies. However, some of the new‐found effects remain disputable due to limited evidence. This study aims to provide suggestive guidelines for future research by identifying the mechanisms that can generate larger economic impacts at the aggregate. The analysis is based on a dynamic general equilibrium world model that is calibrated to published statistics and incorporates empirical estimates on the effects of brain drain. It simulates short‐ and long‐run impacts of increased brain drain on GDP per capita, GNI per capita, and income inequality. The results suggest that more studies should be conducted to further examine how the brain drain influences human capital formation and technology spillovers. Both have significant impacts on domestic production and national income. A better understanding of different remitting patterns is also desirable to understand how to reduce inequality and promote recipients’ investment in productive assets.

Suggested Citation

Lodigiani, Elisabetta and Marchiori, Luca and Shen, I‐Ling, Revisiting the Brain Drain Literature with Insights from a Dynamic General Equilibrium World Model (April 2016). The World Economy, Vol. 39, Issue 4, pp. 557-573, 2016. Available at SSRN: https://ssrn.com/abstract=2764588 or http://dx.doi.org/10.1111/twec.12269

Elisabetta Lodigiani (Contact Author)

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

University of Milan ( email )

Via Festa del Perdono, 7
Milan, 20122
Italy

University of Milan - Centro Studi Luca d'Agliano (LdA)

Via P. Amedeo 34
Milano, Mi 20122
Italy

Luca Marchiori

Banque Centrale du Luxembourg ( email )

2, boulevard Royal
Luxembourg, L-2983
Luxembourg

I‐Ling Shen

South Coast Air Quality Management District (SCAQMD)

21865 Copley Drive
Diamond Bar, CA 91765
United States

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