Migration, Human Capital Formation and the Beneficial Brain Drain Hypothesis: A Note
The recent brain drain literature suggests that migration of highly skilled people can be beneficial for a country as it gives incentives to form additional human capital. We criticise this claim by developing a career concerns model and propose that migration opportunity as an incentive mechanism is unreliable. In addition, we show that when an individual forms two types of human capital, increased migration opportunity for one type has a negative effect on the formation of the other type. The economic benefit and full policy implications of the findings were not addressed in this paper.
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