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Brain drain and factor complementarity

Authors
Journal
Economic Modelling
0264-9993
Publisher
Elsevier
Publication Date
Volume
26
Issue
2
Identifiers
DOI: 10.1016/j.econmod.2008.08.002
Keywords
  • Brain Drain
  • Growth
  • Complementarity
  • Migration

Abstract

Abstract In this paper we develop an extended Solow growth model with emigration which aggregates different types of labor skills from strict complementarity to perfect substitution. The derivation of balanced growth paths shows that the most relevant cases for studying the impact of emigration are those where these paths can only be attained asymptotically. This requires and justifies the need for using transitional dynamics. We therefore derive a complete characterization of the transitional dynamics of output and wages in the sending country for all possible values taken by the elasticity of substitution between skilled and unskilled workers. The model then serves to qualitatively study the effect of brain drain on per capita income and wages of the sending country.

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