Scale Economies in Education and the Brain Drain Problem.

This paper presents a model of brain drain which emphasizes scale economies in advanced education. The author demonstrates that brain drain raises the education and income levels of a host country. However, contrary to the presumption that brain drain hurts the unskilled individuals left in a source country, the author argues that it is actually those professionals possessing intermediate-level abilities who are hurt by brain drain, regardless of whether they choose to stay or emigrate. The author also shows that conventional policies designed to stop brain drain may succeed only in retaining those who are mediocre professionals while the brightest continue to emigrate. Copyright 1991 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.