Brain Drain or Gain

Due to self-selection and skill-selective immigration policies, highly educated individuals exhibit much greater propensity to emigrate internationally than the less educated. Although skill-biased emigration has long been viewed as detrimental to the growth potential of the sending country, recent studies emphasize the fact that it also induces economic benefits. This chapter reviews the existing literature on brain drain and development, documents global selection patterns, and provides updated estimates of the (net) effect of skill-biased emigration on human capital formation, human capital accumulation, and macroeconomic performance for almost every country in the world. The quantitative analysis suggests that skill-biased emigration can be beneficial for human development and economic growth in most countries at the bottom of the income distribution as well as in some middle-income countries.