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A Gain with a Drain? Evidence from Rural Mexico on the New Economics of the Brain Drain

In: Corruption, Development and Institutional Design

Author

Listed:
  • Steve Boucher
  • Oded Stark
  • J. Edward Taylor

Abstract

Recent theoretical work suggests conditions under which a positive probability of migration from a developing country stimulates human capital formation in that country and improves the welfare of migrants and non-migrants alike (Stark et al., 1997, 1998; Stark and Wang, 2002). This ‘brain gain’ hypothesis contrasts with the received, long-held ‘brain drain’ argument, which stipulates that the migration of skilled workers depletes the human capital stock and lowers welfare in the sending country (Usher, 1977; Blomqvist, 1986). The ‘brain gain’ view is that a strictly positive probability of migrating to destinations where the returns to human capital are higher than at origin creates incentives to acquire more human capital in migrant-sending areas.

Suggested Citation

  • Steve Boucher & Oded Stark & J. Edward Taylor, 2009. "A Gain with a Drain? Evidence from Rural Mexico on the New Economics of the Brain Drain," International Economic Association Series, in: János Kornai & László Mátyás & Gérard Roland (ed.), Corruption, Development and Institutional Design, chapter 6, pages 100-119, Palgrave Macmillan.
    • Handle: RePEc:pal:intecp:978-0-230-24217-3_6
    DOI: 10.1057/9780230242173_6
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    References listed on IDEAS

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    1. Blomqvist, Ake G, 1986. "International Migration of Educated Manpower and Social Rates of Return to Education in LDCs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 165-174, February.
    2. 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.
    3. Msuya, John, 1999. "Nutrition Improvement Projects in Tanzania: Appropriate Choice of Institutions Matters," Discussion Papers 280058, University of Bonn, Center for Development Research (ZEF).
    4. 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.
    5. Schultze, Uta, 2000. "Insights from Physics into Development Processes: Are Fat Tails Interesting for Development Research?," Discussion Papers 280882, University of Bonn, Center for Development Research (ZEF).
    6. Stark, Oded, 2000. "On a Variation in the Economic Performance of Migrants by their Home Country's Wage," Discussion Papers 281248, University of Bonn, Center for Development Research (ZEF).
    7. 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.
    8. Kaivan Munshi, 2003. "Networks in the Modern Economy: Mexican Migrants in the U. S. Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(2), pages 549-599.
    9. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human capital depletion, human capital formation, and migration: a blessing or a "curse"?," Economics Letters, Elsevier, vol. 60(3), pages 363-367, September.
    10. Wimmer, Andreas & Schetter, Conrad, 2002. "State-Formation First. Recommendations For Reconstruction And Peace-Making In Afghanistan," Discussion Papers 18740, University of Bonn, Center for Development Research (ZEF).
    11. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    12. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
    13. Usher, Dan, 1977. "Public Property and the Effects of Migration upon Other Residents of the Migrants' Countries of Origin and Destination," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 1001-1020, October.
    14. Kochar, Anjini, 2004. "Urban influences on rural schooling in India," Journal of Development Economics, Elsevier, vol. 74(1), pages 113-136, June.
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