07 February 2011

Brain Gain

The hypothesis goes something like this: first imagine you are born in a poor African country where the financial returns to education are low. Getting yourself qualified isn’t going to magic up any new jobs.

Now imagine there is a chance you might be able to escape to a rich country, where education does matter and has a big impact upon earnings.

The amount you choose to invest in your education depends on your chances of emigrating in the future.
So that’s at the individual level – but here’s the thing; at the national level the promise of emigration might actually increase the stock of educated people rather than reduce it if everyone decides to try and get more education than they would otherwise. 

That’s the hypothesis.

Now for some evidence:
This paper explores a unique household survey purposely designed and conducted to answer this research question. We analyze the case of Cape Verde, a country with allegedly the highest ‘brain drain’ in Africa, despite a marked record of income and human capital growth in recent decades. Our micro data enables us to propose the first explicit test of ‘brain gain’ arguments according to which the prospects of own future migration can positively impact educational attainment. According to our results, a 10pp increase in the probability of own future migration improves the average probability of completing intermediate secondary schooling by 8pp. Our findings are robust to the choice of instruments and econometric model. Overall, we find that there may be substantial human capital gains from lowering migration barriers.
Catia Batista, Aitor Lacuesta, and Pedro C. Vicente, Forthcoming in the Journal of Development Economics, ungated version here

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