ON THE MECHANICS OF THE BRAIN-DRAIN REDUCTION IN POOREST DEVELOPING COUNTRIES

Abstract

This article examines how endogenous human capital of the developed countries expressed by professors trained there and endogenous human capital of the developing countries expressed by their students, interact in the developing country's education sector to create higher quality goods. Private and public incentives to invest in human capital accumulation finance the employment of the skilled labor in the education sector, while non rival technology is a by-product of the education process. Both the optimal and the competitive equilibria define the efficient point able to lead the economy to the long-run growth. This point is also the locus where knowledge call policy as the required efficiency to reduce the brain drain phenomenon. Indeed, the model provides theoretical foundations of the relative lack of the high skilled labor in developing countries.Keywords: Absorption Cost, Abroad Trained Professor, Domestic Trained Professor, Private Education, Public EducationJEL classification: E60, E62, O11, O22(ProQuest: ... denotes formulae omitted.)1. INTRODUCTIONThe aim of this paper is to provide theoretical foundations of the relative lack of high skilled labors in developing countries.According to the OECD data on skilled labor migrations, 85% of skilled migrants of developed countries are developing countries natives. This highly skilled labor stock was about 20.5 millions in 2000 and keeps increasing over time (see the figure). The most affected countries are United States, Canada, Australia, Germany and France. Recent comparative data on highly skilled labor immigrants from developing countries living in the OECD member countries show 63.7% increase for skilled immigrants in ten years against 14.4% increase for unskilled immigrants only (Docquier Marfouk, 2006). The vast majority of those highly skilled immigrants represent more than a third of total immigration to the OECD countries actually (Beine Docquier Rapoport, 2008). Moreover, the recent June 2009 G8 Conference focused on the Way Western Countries Can Help Africa Overcome Poverty because under-development remains a major goal in Sub-Saharan Africa.Therefore, the under-development debate began since the 1950s through the standard economic development theory (Hirschman, 1958; Leibenstein, 1957; Lewis, 1954; Myrdal, 1957; Nelson, 1956; Roseinstein Rodan, 1943) remains widely open. Because the Big-Push (Roseinstein Rodan, 1943), the Economic Dualism (Lewis, 1954), the Stages of Economic Development (Rostow, 1960) and The Strategy of Economic Development (Hirschman, 1958) for example, couldn't provide real solutions to the Sub-Saharan Africa's growth absence. Indeed, the standard economic development theory fell in the middle of the 1970s, more because of the lack of methodology than the lack of ideology (Krugman, 1993). Therefore, New Development Economics research line with well specified methodologies is launched.Lewis (1954) opens two modeled research lines in development economics. The first line deals with international migrations of the high skilled labor i.e., the Brain Drain (Kim, 1976; Delacroix Docquier, 2012) based on Grubel Scott (1966). The second modeled research line due to Lewis (1954) is regional migrations (Fan, 1979; Carvajal Upahiaya, 1986; Bharati Basu, 1999; Todaro, 1980; and Lee, 1976) based on Harris Todaro (1966).Roseinstein-Rodan (1943) is modeled by Murphy-Shleifer-Vishny (1989) and previously introduced in new economic development theory by Waters (1978), Chen (1994), and Ahn (1990). The rest of the ideas provided by standard economic development theory and introduced in new development economics since the 1990s by Issa (2005) and Nissan Niroomand (2006) for example, are mostly based on Romer (1986) and Lucas (1988). The last two endogenous growth models explain increasing returns and knowledge externalities through the neoclassical growth model of Solow (1956) extended to human capital initiated by Becker (1964) and Schultz (1961). …