IDEAS home Printed from https://ideas.repec.org/a/eee/jcecon/v43y2015i2p443-455.html
   My bibliography  Save this article

Brain drain reversal and return subsidy

Author

Listed:
  • Dai, Tiantian
  • Liu, Xiangbo
  • Xie, Biancen

Abstract

This paper explores how return subsidies affect an individual’s education, migration and return decisions within an asymmetric information framework. To achieve this, we develop a theoretical model in which agents are heterogeneous in their initial stocks of human capital. Our model can generate three types of migration at the same time: permanent migration, immediate return migration, and return migration with international work experience. We then examine the effects of differential return subsidies in different contexts and find that in the presence of asymmetric information, it is possible for return subsidies to play a negative role in determining a developing country’s aggregate and average human capital stock, and thus its economic growth.

Suggested Citation

  • Dai, Tiantian & Liu, Xiangbo & Xie, Biancen, 2015. "Brain drain reversal and return subsidy," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 443-455.
  • Handle: RePEc:eee:jcecon:v:43:y:2015:i:2:p:443-455
    DOI: 10.1016/j.jce.2014.03.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0147596714000183
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jce.2014.03.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A brain gain with a brain drain," Economics Letters, Elsevier, vol. 55(2), pages 227-234, August.
    2. Mayr Karin & Peri Giovanni, 2009. "Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-52, November.
    3. Lalonde, Robert J. & Topel, Robert H., 1993. "Economic impact of international migration and the economic performance of migrants," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 14, pages 799-850, Elsevier.
    4. Mountford, Andrew, 1997. "Can a brain drain be good for growth in the source economy?," Journal of Development Economics, Elsevier, vol. 53(2), pages 287-303, August.
    5. George J. Borjas & Bernt Bratsberg, 2021. "Who Leaves? The Outmigration Of The Foreign-Born," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 5, pages 93-104, World Scientific Publishing Co. Pte. Ltd..
    6. Kwok, Viem & Leland, Hayne, 1982. "An Economic Model of the Brain Drain," American Economic Review, American Economic Association, vol. 72(1), pages 91-100, March.
    7. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
    8. Jerik Hanushek & Dennis Kimko, 2006. "Schooling, Labor-force Quality, and the Growth of Nations," Voprosy obrazovaniya / Educational Studies Moscow, National Research University Higher School of Economics, issue 1, pages 154-193.
    9. Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, vol. 86(1), pages 29-46, October.
    10. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence," RF Berlin - CReAM Discussion Paper Series 0702, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    11. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence from the UK," British Journal of Industrial Relations, London School of Economics, vol. 45(2), pages 236-256, June.
    12. Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, vol. 86(1), pages 29-46, October.
    13. Lien, Da-Hsiang Donald, 1993. "Asymmetric Information and the Brain Drain," Journal of Population Economics, Springer;European Society for Population Economics, vol. 6(2), pages 169-180, May.
    14. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    15. Mayr Karin & Peri Giovanni, 2009. "Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-52, November.
    16. Dennis J. Aigner & Glen G. Cain, 1977. "Statistical Theories of Discrimination in Labor Markets," ILR Review, Cornell University, ILR School, vol. 30(2), pages 175-187, January.
    17. Robert J. Barro, 2001. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 91(2), pages 12-17, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gega Todua, 2017. "Financing Education Abroad: A Developing Country Perspective," CERGE-EI Working Papers wp608, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    2. Abdulloev, Ilhom & Epstein, Gil S. & Gang, Ira N., 2019. "Schooling Forsaken: Education and Migration," IZA Discussion Papers 12088, Institute of Labor Economics (IZA).
    3. Abdulloev, Ilhom, 2020. "Changes in the Forsaken Schooling and Migration Relationship in Tajikistan," IZA Discussion Papers 13435, Institute of Labor Economics (IZA).
    4. Fitwi, Abrar M. & Hein, Scott E. & Mercer, Jeffrey M., 2015. "The U.S. housing price bubble: Bernanke versus Taylor," Journal of Economics and Business, Elsevier, vol. 80(C), pages 62-80.
    5. Adetola Akinto, 2021. "Critical review of the use of financial incentives in solving health professionals' brain drain," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(4), pages 446-454, June.
    6. Abdulloev Ilhom & Epstein Gil S. & Gang Ira N., 2020. "Migration and Forsaken Schooling in Kyrgyzstan, Tajikistan, and Uzbekistan," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-27, January.
    7. Abdulloev Ilhom & Epstein Gil S. & Gang Ira N., 2020. "A Downside to the Brain Gain Story," Economics, Sciendo, vol. 8(2), pages 9-20, December.
    8. Abdulloev, Ilhom & Epstein, Gil S. & Gang, Ira N., 2020. "Job Status, International Migration and Educational Choice," GLO Discussion Paper Series 709, Global Labor Organization (GLO).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Frédéric Docquier & Hillel Rapoport, 2012. "Globalization, Brain Drain, and Development," Journal of Economic Literature, American Economic Association, vol. 50(3), pages 681-730, September.
    2. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    3. Mayr Karin & Peri Giovanni, 2009. "Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-52, November.
    4. Bertoli, Simone & Brücker, Herbert, 2011. "Selective immigration policies, migrants' education and welfare at origin," Economics Letters, Elsevier, vol. 113(1), pages 19-22, October.
    5. Dustmann, Christian & Fadlon, Itzhak & Weiss, Yoram, 2011. "Return migration, human capital accumulation and the brain drain," Journal of Development Economics, Elsevier, vol. 95(1), pages 58-67, May.
    6. Alexander Haupt & Tim Krieger & Thomas Lange, 2010. "A Note on Brain Gain and Brain Drain: Permanent Migration and Education Policy," Working Papers CIE 27, Paderborn University, CIE Center for International Economics.
    7. Giovanni Peri & William Ambrosini & Karin Mayr & Dragos Radu, 2012. "The Selection of Migrants and Returnees in Romania: Evidence and long-run implications," Working Papers 136, University of California, Davis, Department of Economics.
    8. Laurent Bossavie & Çağlar Özden, 2023. "Impacts of Temporary Migration on Development in Origin Countries," The World Bank Research Observer, World Bank, vol. 38(2), pages 249-294.
    9. Docquier, Frederic & Rapoport, Hillel, 2004. "Skilled migration: the perspective of developing countries," Policy Research Working Paper Series 3382, The World Bank.
    10. Ambrosini, J. William & Mayr, Karin & Peri, Giovanni & Radu, Dragos, 2012. "The Selection of Migrants and Returnees in Romania: Evidence and Long-Run Implications," IZA Discussion Papers 6664, Institute for the Study of Labor (IZA).
    11. J. William Ambrosini & Karin Mayr & Giovanni Peri & Dragos Radu, 2011. "The Selection of Migrants and Returnees: Evidence from Romania and Implications," NBER Working Papers 16912, National Bureau of Economic Research, Inc.
    12. Hanson, Gordon H., 2010. "International Migration and the Developing World," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4363-4414, Elsevier.
    13. Simona Monteleone, 2009. "Brain drain e crescita economica: Una rassegna critica sugli effetti prodotti," Working Papers 2_2009, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    14. Docquier, Frédéric, 2006. "Brain Drain and Inequality Across Nations," IZA Discussion Papers 2440, Institute of Labor Economics (IZA).
    15. Bertoli Simone & Brücker Herbert, 2011. "Extending the Case for a Beneficial Brain Drain," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(4), pages 466-478, August.
    16. Hatton, Timothy J., 2014. "The economics of international migration: A short history of the debate," Labour Economics, Elsevier, vol. 30(C), pages 43-50.
    17. Di Maria, Corrado & Lazarova, Emiliya A., 2012. "Migration, Human Capital Formation, and Growth: An Empirical Investigation," World Development, Elsevier, vol. 40(5), pages 938-955.
    18. Björn NILSSON, 2019. "Education and migration: insights for policymakers," Working Paper 23ca9c54-061a-4d60-967c-f, Agence française de développement.
    19. Julio Acuna, 2023. "The Asymmetric Impact of Out-Migration and Return Migration on Wages in the Source Country: Evidence from Mexico," Journal of Human Capital, University of Chicago Press, vol. 17(2), pages 173-206.
    20. Desai, Mihir A. & Kapur, Devesh & McHale, John & Rogers, Keith, 2009. "The fiscal impact of high-skilled emigration: Flows of Indians to the U.S," Journal of Development Economics, Elsevier, vol. 88(1), pages 32-44, January.

    More about this item

    Keywords

    Return migration; Economic growth;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jcecon:v:43:y:2015:i:2:p:443-455. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622864 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.