Temporary Brain Drain, Distance to the Frontier, and Welfare at Origin

The article analyzes the possible impact of a brain drain on the economies of six selected European countries, suggesting that this impact may be positive in the long run due to a combination of factors including temporary migration, an educational effect and increased capability for technology adoption. According to the author, research shows that temporary migration is a widespread trend that involves a significant number of people, especially during an economic crisis. Recent empirical studies also confirm that temporary migration may have a positive effect on the economies of sending countries, improving their total factor productivity (TFP) and speeding up technology adoption, the author says. The article develops a simple two-period model analyzing the possible “brain gain” pattern resulting from return migration. The model is structured so as to show changes in the human capital of both sending and receiving countries in the short and long run. This mathematical structure is then simulated with the use of statistical data from various sources. Each studied country experiences an unexpected shock resulting in either an increase or a decrease of the brain drain, which is then fixed in the subsequent periods. The empirical results indicate that most developed countries are likely to benefit from a brain gain, whereas poorer states usually experience a brain drain in the long run, the author says. The opposite is true of welfare, he adds: the simulations indicate that poorer countries are likely to experience significant economic growth.