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

Extending both the “harmful brain drain” literature and the “beneficial brain gain” literature, this paper analyzes both the negative and the positive impact of migration by skilled individuals in a unified framework. The paper extends the received literature on the “harmful brain drain” by showing that in the short run, international migration can result in “educated unemployment” and in overeducation in developing countries, as well as in a brain drain from these countries. A simulation suggests that the costs of the negative consequences of “educated unemployment” and overeducation can amount to significant losses for the individuals concerned, who may constitute a substantial proportion of the educated individuals. Adopting a dynamic framework, it is then shown that due to the positive externality of the prevailing, economy-wide endowment of human capital on the formation of human capital, a relaxation in migration policy in both the current period and the preceding period can facilitate “take-off” of a developing country in the current period. Thus, it is suggested that while a controlled migration of skilled individuals may reduce the social welfare of those who stay behind in the short run, it improves it in the long run

The Brain Drain, “Educated Unemployment,” Human Capital Formation, and Economic Betterment

Extending both the “harmful brain drain” literature and the “beneficial brain gain” literature, this paper analyzes both the negative and the positive impact of migration by skilled individuals in a unified framework. The paper extends the received literature on the “harmful brain drain” by showing that in the short run, international migration can result in “educated unemployment” and overeducation in developing countries, as well as a brain drain from these countries. A simulation suggests that the costs of “educated unemployment” and overeducation can amount to significant losses for the individuals concerned, who may constitute a substantial proportion of the educated individuals. Adopting a dynamic framework, it is then shown that due to the positive externality of the prevailing, economy-wide endowment of human capital on the formation of human capital, a relaxation in migration policy in both the current period and the preceding period can facilitate “take-off” of a developing country in the current period. Thus, it is suggested that while the migration of some educated individuals may reduce the social welfare of those who stay behind in the short run, it improves it in the long run.

A Theory of Migration as a Response to Occupational Stigma

A theory is developed of labor migration that is prompted by a desire to avoid "social humiliation." In a general equilibrium framework it is shown that as long as migration can reduce humiliation sufficiently, migration will occur even between two identical economies. Migration increases the number of individuals who choose to perform degrading jobs and consequently, migration lowers the price of the good produced in the sector that is associated with low social status. Moreover, the greater an individual’s aversion to performing degrading jobs, the more likely it is that he will experience a welfare gain when the economy opens up.Migration, social distance, occupational status, social exposure gains, general equilibrium,

Migration for degrading work as an escape from humiliation

This paper develops a model of voluntary migration into degrading work. The essence of the model is a tension between two “bads:” that which arises from being relatively deprived at home, and that which arises from engaging in humiliating work away from home. Balancing between these two “bads” can give rise to an explicit, voluntary choice to engage in humiliating work. The paper identifies conditions under which a migrant will choose to engage in degrading work rather than being forced into it, to work abroad as a prostitute, say, rather than on a farm. The paper delineates the possible equilibria and finds that greater relative deprivation will make it more likely that the equilibrium outcome will be “engagement in prostitution.” It is shown that under well specified conditions, every individual will work as a prostitute, yet every individual would be better off working on a farm. Put differently, when specific conditions are satisfied, there is a possibility of a “coordination failure:” if individuals believe that everyone else will choose to be a prostitute, this belief will be self-fulfilling. In this case, all the individuals choose to engage in prostitution, which renders each of them worse off. The paper discusses various policy implications. It is shown that a policy intervention (a crackdown on migrants’ engagement in prostitution), if implemented strictly, can increase everyone’s welfare, but when the policy is implemented loosely, cracking down on prostitution will only reduce individuals’ welfare without reducing their engagement in prostitution.Migrants; Relative deprivation; Degrading work; Humiliation; Multiple equilibria; Welfare assessment; Policy implications

International migration and educated unemployment

This paper provides a novel explanation of educated unemployment, which is a salient feature of the labor markets in a number of developing countries. In a simple job-search framework we show that educated unemployment is caused by the perspective of international migration, that is, by the possibility of a brain drain. In addition, the analysis shows that a developing country may end up with more educated workers despite the brain and educated unemployment.Dieser Aufsatz liefert einen neuen Erklärungsansatz für Arbeitslosigkeit bei gebildeten Personen, einem hervorstechenden Kennzeichen des Arbeitsmarktes in vielen Entwicklungsländern. In einem einfachen Stellensuchmodell wird gezeigt, dass die Arbeitslosigkeit von gebildeten Personen durch die Aussicht auf internationale Migration verursacht ist, d.h. durch die Möglichkeit der Abwanderung hoch qualifizierter Arbeitskräfte. Darüber hinaus zeigt die Untersuchung, dass ein Entwicklungsland trotz der Abwanderung hoch qualifizierter Arbeitskräfte und trotz der Arbeitslosigkeit von gebildeten Personen letztendlich dennoch über eine größere Anzahl gebildeter Arbeitskräfte verfügen könnte

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

Extending both the 'harmful brain drain' literature and the 'beneficial brain drain' literature, this paper analyzes both the negative and the positive impact of migration by skilled individuals in a unified framework. The paper extends the received literature on the 'harmful brain drain' by showing that in the short run, international migration can result in 'educated unemployment' and overeducation in developing countries, as well as a brain drain from these countries. A simulation suggests that the costs of 'educated unemployment' and overeducation can amount to significant losses for the individuals concerned, who may constitute a substantial proportion of the educated individuals. Adopting a dynamic framework, it is then shown that due to the positive externality of the prevailing, economy-wide endowment of human capital on the formation of human capital, a relaxation in migration policy in both the current period and the preceding period can facilitate 'take-off' of a developing country in the current period. Thus, it is suggested that while a controlled migration of educated individuals may reduce the social welfare of those who stay behind in the short run, it improves it in the long run

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

Extending both the harmful brain drain literature and the beneficial brain gain literature, this paper analyzes both the negative and the positive impact of migration by skilled individuals in a unified framework. The paper extends the received literature on the harmfulbrain drain by showing that in the short run, international migration can result in educated unemployment and overeducation in developing countries, as well as a brain drain from these countries. A simulation suggests that the costs of educated unemployment and overeducation can amount to significant losses for the individuals concerned, who may constitute a substantial proportion of the educated individuals. Adopting a dynamic framework, it is then shown that due to the positive externality of the prevailing, economy-wide endowment of human capital on the formation of human capital, a relaxation in migration policy in both the current period and the preceding period can facilitate take-off of a developing country in the current period. Thus, it is suggested that while the migration of some educated individuals may reduce the social welfare of those who stay behind in the short run, it improves it in the long run.In diesem Aufsatz analysieren die Autoren den negativen als auch den positiven Einfluss der Migration qualifizierter Individuen in einem vereinheitlichten Rahmen, wobei an die bestehende Literatur sowohl zum ”nachteiligen Braindrain” als auch zum ”vorteilhaften Braingain” angeknüpft und diese jeweils erweitert wird. Die Autoren zeigen, dass internationale Migration in Entwicklungsländern kurzfristig zu Arbeitslosigkeit unter gut ausgebildeten Arbeitskräften und zu einem Überangebot an Bildung sowie zu einem Braindrain aus diesen Ländern führen kann. Die Ergebnisse einer Simulation legen nahe, dass die Kosten, die durch Arbeitslosigkeit von Hochqualifizierten und "Überbildung" verursacht werden, zu signifikanten Einbußen bei den betroffenen Individuen führen können. Durch Verwendung eines dynamischen Modells wird gezeigt, dass aufgrund des positiven Effektes, den eine gute Ausstattung mit Humankapital auf die Bildung von Humankapital hat, eine Entspannung in der Migrationspolitik den Take-off eines Entwicklungslandes bewirken kann. Hieraus lässt sich schlussfolgern, dass obwohl die Migration einiger gebildeter Individuen die öffentliche Wohlfahrt derer eventuell einschränkt, die kurzfristig zurückbleiben, wird sie diese langfristig verbessern

The analytics of seasonal migration

A framework that yields different possible patterns of migration as optimal solution to a simple utility maximization problem is presented and explored. It is shown that seasonal migration arises as an optimal endogenous response to a comparison of costs (of living and of separation) and returns (to work) over a set of three alternative options, even if a year-long migration is feasible.Das vorliegende Papier präsentiert einen Ansatz, der verschieden mögliche Migrationsmuster als optimale Lösungen zu einem einfachen Nutzenmaximierungsproblem erzeugt. Es wird gezeigt, dass bei der Auswahl aus drei Optionen, basierend auf einem Vergleich von Kosten (Lebenshaltungskosten und Trennungskosten) und Erträgen (Arbeit), die saisonale Migration eine optimale endogene Strategie ist, sogar dann, wenn eine ganzjährige Migration möglich ist

Rural-to-Urban Migration, Human Capital, and Agglomeration

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