Nu. Haque et Sj. Kim, HUMAN-CAPITAL FLIGHT - IMPACT OF MIGRATION ON INCOME AND GROWTH, Staff papers - International Monetary Fund, 42(3), 1995, pp. 577-607
An endogenous growth model with heterogeneous agents is analyzed to sh
ow that ''human capital flight'' or ''brain drain'' can lead to a perm
anent reduction in income and growth of the country of emigration rela
tive to the country of immigration. Convergence between the two is the
refore rendered unlikely with such migration. While, in a closed econo
my, subsidizing human capital accumulation at all levels of education
can benefit economic growth, in an open economy where the educated are
more likely to migrate, growth may be better fostered by subsidizing
only lower levels of education.