On the Robustness of Brain Gain Estimates

Abstract

Recent theoretical studies suggest that migration prospects can raise the expected return to human capital and thus foster education investment at home or, in other words, induce a brain gain. In a recent paper we used the Docquier and Marfouk [2006] data set on emigration rates by education level to examine the impact of brain drain migration on gross (pre-migration) human capital formation in developing countries. We found a positive effect of skilled migration prospects on human capital growth in a cross-section of 127 developing countries, with a short-run elasticity of about 5 percent. In this paper, we assess the robustness of our results to the use of alternative brain drain measures, definitions of human capital, and functional forms. We find that the results hold using alternative brain drain measures controlling for whether migrants acquired their skills in the home or in the host country. We also regress other indicators of human capital investment on skilled migration rates and find a positive effect on youth literacy while the effect on school enrolment depends on the exact functional form specification chosen. Finally, we find our results to be robust to using the ratio of skilled to unskilled migration rates (instead of just the former) and to controlling for the demographic structure of the population.