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A Quantitative General Equilibrium Approach to Migration, Remittances and Brain Drain

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  • Cespedes, Nikita

    (University of Rochester)

Abstract

Developing countries have experienced an outstanding outflow of skilled workers (brain- drain) over the last several decades. Additionally, migrants tend to be tied to their country of birth, since they send a large amount of remittances to their relatives. Furthermore, migration is not permanent, since a considerable number of workers return to their country of birth after a migration spell. In this paper we develop a model that is consistent with these facts. We use our model to address some important issues in the migration literature from a theoretical perspective. We study the general equilibrium effects of migration, its long-term effects, and its welfare effects, and we see whether the joint effect of return migration and remittances is strong enough to offset the effects of skilled migration. Finally, we evaluate the effectiveness of policy interventions that attempts to offset the effects of a brain drain.

Suggested Citation

  • Cespedes, Nikita, 2011. "A Quantitative General Equilibrium Approach to Migration, Remittances and Brain Drain," Working Papers 2011-007, Banco Central de Reserva del Perú.
    • Handle: RePEc:rbp:wpaper:2011-007
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    References listed on IDEAS

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    1. Bhagwati, Jagdish & Hamada, Koichi, 1974. "The brain drain, international integration of markets for professionals and unemployment : A theoretical analysis," Journal of Development Economics, Elsevier, vol. 1(1), pages 19-42, April.
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    Cited by:

    1. Diego Alberto Sandoval Herrera & María Fernanda Reyes Roa, 2012. "¿Por qué los migrantes envían remesas?: Repaso de las principales motivaciones microeconómicas," Borradores de Economia 10036, Banco de la Republica.
    2. Hugo Benítez-Silva & Eva Cárceles-Poveda & Selçuk Eren, 2011. "Effects of Legal and Unauthorized Immigration on the U.S. Social Security System," Working Papers wp250, University of Michigan, Michigan Retirement Research Center.

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    More about this item

    Keywords

    Migration; General Equilibrium; Brain drain; Remittances; Heterogeneous Agents;
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