Abstract
I investigate the effects of transferability of human capital on the labour-sending country’s total human capital, i.e. which of the brain drain and the brain gain happens in a steady state and in the short run under the different degrees of human capital transferability. I find that if transferability of human capital is low, education demand is small and no individuals migrate. Conversely, if it is high, education demand is large and individuals with high innate ability attempt to migrate. I also find that even with high transferability, the labour-sending country experiences the brain drain in both the short run and steady state if the wage disparity is small between labour-sending and labour-receiving countries. However, if it is large, high transferability brings about the brain gain in a steady state whereas the brain drain might occur in the short run. Accordingly, highly transferable human capital does not necessarily contribute to raising the labour-sending country’s total human capital. The labour-sending country might be faced with a trade-off in raising its total human capital in the short run and steady state.
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call