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Brain gain : claims about its size and impact on welfare and growth are greatly exaggerated
 
Author:Schiff, Maurice; Collection Title:Policy, Research working paper ; no. WPS 3708
Country:World; Date Stored:2005/09/01
Document Date:2005/09/01Document Type:Policy Research Working Paper
SubTopics:International Migration; Curriculum & Instruction; Economic Theory & Research; Education and Society; Health Monitoring & EvaluationLanguage:English
Region:The World RegionReport Number:WPS3708
Volume No:1 of 1  

Summary: Based on static partial equilibrium analysis, the "new brain drain" literature argues that, by raising the return to education, a brain drain generates a brain gain that is, under certain conditions, larger than the brain drain itself, and that such a net brain gain results in an increase in welfare and growth due to education's positive externalities. This paper argues that these claims are exaggerated. In the static case, and based on both partial and general equilibrium considerations, the paper shows that (1) the size of the brain gain is smaller than suggested in that literature; (2) the impact on welfare and growth is smaller as well (for any brain gain size); (3) a positive brain gain is likely to result in a smaller, possibly negative, human capital gain; (4) an increase in the stock of human capital may have a negative impact on welfare and growth; and (5) in a dynamic framework, the paper shows that the steady-state brain gain is equal to the brain drain so that a 'beneficial brain drain' cannot take place, and a net brain loss is likely during the transition.

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