Education, economic growth, and brain drain

This paper constructs a two-sector overlapping-generations model of endogen ous growth to study the effects of brain drain on growth, education and inc ome distribution. It is shown that brain drain reduces the economic growth rate and generally hurts the non-emigrants through the static income-distri butional effects and the dynamic damage on economic growth and human capita l accumulation. If the initial rate of human capital accumulation is relati vely low, brain drain could deteriorate both the sum of discounted income a nd lifetime discounted utility of a representative non-emigrant. The govern ment can choose to spend more on education to lessen the detrimental growth effects of brain drain. (C) 1999 Published by Elsevier Science B.V. All ri ghts reserved.