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Skilled Emigration and its Impact on Economic Development

Hoffmann, Mia LU (2018) NEKN01 20181
Department of Economics
Abstract (Swedish)
This paper analyzes the impact of skilled emigration on the economic development of sending countries. Specifically, our study is concerned with how feedback effects of brain drain may mitigate some of the loss incurred from the outflow of talent. We construct an endogenous growth model incorporating skilled emigration to consider in detail how the inflow of remittances, network externalities of the diaspora and the incentive effect influence economic growth. Our model suggests that the overall impact on growth is co-determined by the level of development in the source economy. While intermediately advanced countries most likely experience beneficial effects on productivity growth, low-income and high-income economies may be hindered by... (More)
This paper analyzes the impact of skilled emigration on the economic development of sending countries. Specifically, our study is concerned with how feedback effects of brain drain may mitigate some of the loss incurred from the outflow of talent. We construct an endogenous growth model incorporating skilled emigration to consider in detail how the inflow of remittances, network externalities of the diaspora and the incentive effect influence economic growth. Our model suggests that the overall impact on growth is co-determined by the level of development in the source economy. While intermediately advanced countries most likely experience beneficial effects on productivity growth, low-income and high-income economies may be hindered by binding budget constraints and an inoperative incentive effect, respectively. While some model implications hold up when tested empirically, others do not which might be related to shortcomings in our data and consequential inconsistencies in productivity estimates. (Less)
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author
Hoffmann, Mia LU
supervisor
organization
course
NEKN01 20181
year
type
H1 - Master's Degree (One Year)
subject
keywords
Brain Drain, migration, growth, human capital, development
language
English
id
8958281
date added to LUP
2018-09-26 10:46:09
date last changed
2018-09-26 10:46:09
@misc{8958281,
  abstract     = {This paper analyzes the impact of skilled emigration on the economic development of sending countries. Specifically, our study is concerned with how feedback effects of brain drain may mitigate some of the loss incurred from the outflow of talent. We construct an endogenous growth model incorporating skilled emigration to consider in detail how the inflow of remittances, network externalities of the diaspora and the incentive effect influence economic growth. Our model suggests that the overall impact on growth is co-determined by the level of development in the source economy. While intermediately advanced countries most likely experience beneficial effects on productivity growth, low-income and high-income economies may be hindered by binding budget constraints and an inoperative incentive effect, respectively. While some model implications hold up when tested empirically, others do not which might be related to shortcomings in our data and consequential inconsistencies in productivity estimates.},
  author       = {Hoffmann, Mia},
  keyword      = {Brain Drain,migration,growth,human capital,development},
  language     = {eng},
  note         = {Student Paper},
  title        = {Skilled Emigration and its Impact on Economic Development},
  year         = {2018},
}