Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe

The B.E. Journal of Economic Analysis and Policy, 9/1, 1935-1682, 2019

Posted: 27 Sep 2019

See all articles by Karin Mayr-Dorn

Karin Mayr-Dorn

Johannes Kepler University of Linz

Giovanni Peri

University of California, Davis - Department of Economics

Date Written: September 18, 2019

Abstract

This paper develops a novel model of optimal education, migration and return by heterogeneous, forward-looking agents. The model is parameterized and simulated to analyze the effects of immigration policies, identifying the brain-drain, brain-gain and brain-return effects when barriers to migration are reduced. We use parameters from the literature to inform our model and simulate migration and return from middle-income to industrialized countries. In particular, we apply the model to study migration and return between Eastern and Western Europe. We find that, for plausible degrees of openness, the possibility of return migration combined with the education incentive channel turns the brain drain into a brain gain for Eastern Europe.

Keywords: skilled migration, return migration, returns to education, Eastern-Western Europe

Suggested Citation

Mayr-Dorn, Karin and Peri, Giovanni, Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe (September 18, 2019). The B.E. Journal of Economic Analysis and Policy, 9/1, 1935-1682, 2019, Available at SSRN: https://ssrn.com/abstract=3455895

Karin Mayr-Dorn (Contact Author)

Johannes Kepler University of Linz ( email )

Altenbergerstrasse 69
Linz, Upper Austria 4040
Austria

Giovanni Peri

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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