Brain drain and economic growth: Theory and evidence

Michel Beine, Frédéric Docquier, Hillel Rapoport*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

437 Citations (Scopus)

Abstract

We focus on the impact of migration prospects on human capital formation and growth in a small, open developing economy. We assume that agents are heterogeneous in skills and take their educational decisions in a context of uncertainty regarding future migrations. We distinguish two growth effects: an ex ante "brain effect" (migration prospects foster investments in education because of higher returns abroad), and an ex post "drain effect" (because of actual migration flows). The case for a beneficial brain drain (BBD) emerges when the first effect dominates, i.e., when the average level of human capital is higher in the economy opened to migrations than in the closed economy. We derive the theoretical conditions required for such a possibility to be observed. Using cross-section data for 37 developing countries, we find that the possibility of a BBD could be more than a theoretical curiosity.

Original languageEnglish
Pages (from-to)275-289
Number of pages15
JournalJournal of Development Economics
Volume64
Issue number1
DOIs
Publication statusPublished - 2001

Keywords

  • Brain drain
  • Growth
  • Human capital formation
  • Migration

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