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wiiw Seminar in
International Economics |
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Brain Drain and Brain Return: Theory and Application to
Eastern-Western Europe
Karin Mayr, University of Vienna
(with Giovanni Peri)
15 October 2009, 4 p.m. |
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organized in cooperation with the Joint Vienna Institute |
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Recent
empirical evidence seems to show that temporary migration is
a widespread phenomenon, especially among highly skilled workers
who return to their countries of origin when these begin to
grow. This paper develops a simple, tractable overlapping generations
model that provides a rationale for return migration and predicts
who will migrate and who returns among agents with heterogeneous
abilities. The model also incorporates the interaction between
the migration decision and schooling: the possibility of migrating,
albeit temporarily, to a country with high returns to skills
produces positive schooling incentive effects. We use parameter
values from the literature and data on return migration to simulate
the model for the Eastern-Western European case. We then quantify
the effects that increased openness (to migrants) would have
on human capital and wages in Eastern Europe. We find that,
for plausible values of the parameters, the possibility of return
migration combined with the education incentive channel reverses
the brain drain into a significant brain gain for Eastern Europe.
Keywords: skilled migration, return migration, returns to education,
Eastern-Western Europe
JEL classifications: F22, J61, O15. |
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