The brain drain, 'educated unemployment', human capital formation, and economic betterment

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Book chapter

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Corruption, development and institutional design

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Labour migration has long been a topic of intense interest in population research in general and in development economics in particular. The topic has been gaining added appeal in the era of globalization. The received wisdom has been that such migration results in a detrimental brain drain for the developing countries (for a systematic review see Bhagwati and Wilson, 1989).1 A recent and growing literature argues that the brain drain is accompanied by a beneficial brain gain.2 The new writings contend that compared with a closed economy, an economy open to migration differs not only in the opportunities that workers face but also in the structure of the incentives that they confront; higher prospective returns to human capital in a foreign country impinge favourably on human capital formation decisions at home.



Funding Information

Financial support from the Humboldt Foundation, the Sohmen Foundation, and the International Centre for the Study of East Asian Development.

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Copyright © International Economics Association 2009. Access to external full text or publisher's version may require subscription.

Additional Information

Paper presented at the 14th World Congress of the International-Economic-Association(IEA), Aug 29-Sep 02, 2005, Marrakech, Morocco.

ISBN of the source publication: 9780230242173

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Recommended Citation

Stark, O., & Fan, C. S. (2009). The brain drain, 'educated unemployment', human capital formation, and economic betterment. In Corruption, development and institutional design (pp. 120-151). Basingstoke: Palgrave. doi: 10.1057/9780230242173_7