THE INCONSISTENCY OF “BRAIN GAIN”: THE SCHOOLING-MIGRATION NEXUS REVISITED

Abstract

This paper analyzes the impact of emigration of high-skilled workers on the skill formation in a small sending country within an Overlapping Generations framework. In contrast to the preceding literature, emigration is explicitly modelled as the outcome of a deterministic decision-process and domestic wages respond endogenously to the outflow. It is shown that lowering emigration barriers in this general equilibrium framework never results into a positive long-run effect on human capital despite positive repercussions on schooling, which challenges the propositions of the more stylized class of 'brain gain' models. Implications for policy designs in developing countries as well as for empirical research are discussed.