The brain drain and the world distribution of income

Andre Mountford, Hillel Rapoport

Research output: Contribution to journalArticlepeer-review

46 Scopus citations

Abstract

Skilled emigration (or brain drain) from developing to developed countries is becoming the dominant pattern of international migration today. Such migration is likely to affect the world distribution of income both directly, through the mobility of people, and indirectly, as the prospect of migration affects the rate of return to education in both the sending and receiving economies. This migration pattern will therefore affect human capital accumulation and fertility decisions in both the sending and receiving economies. This paper analyzes these effects in a dynamic two country model of the world economy where agents in both countries make optimal fertility and human capital decisions. The implications of the analysis for the world distribution of income are derived in the light of recent empirical findings of the brain drain literature. The analysis shows that the current trend towards predominantly skilled emigration from poor to rich countries may in the long run increase inequality in the world distribution of income as relatively poor countries grow large in terms of population. In the short run however, it is possible for world inequality to fall due to rises in GDP per capita in large developing economies with sufficiently low skilled emigration rates.

Original languageEnglish
Pages (from-to)4-17
Number of pages14
JournalJournal of Development Economics
Volume95
Issue number1
DOIs
StatePublished - May 2011

Bibliographical note

Funding Information:
Hillel Rapoport acknowledges the support of the Agence Française de Développement and of the Adar Foundation at Bar-Ilan University .

Funding

Hillel Rapoport acknowledges the support of the Agence Française de Développement and of the Adar Foundation at Bar-Ilan University .

FundersFunder number
Agence Française de Développement and of the Adar Foundation at Bar-Ilan University

    Keywords

    • Brain drain
    • Endogenous fertility
    • Growth
    • Migration
    • World distribution of income

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