A model of the brain drain and circulation

A Model of the Brain Drain and Circulation Chen Bo October 2005 RIIM Research on Immigration and Integration in the Metropolis The Vancouver Centre is funded by grants from the Social Sciences and Humanities Research Council of Canada, Citizenship & Immigration Canada, Simon Fraser University, the University of British Columbia and the University of Victoria. [...] Moreover, adding elements of the real world, assume that living costs are the same across countries and people are all risk neutral, then I argue that the cause or motivation to immigrate is owing to the difference in the expected lifetime incomes between countries. [...] For example, the motivation for emigrating to B from A is merely due to the relative income advantage in B, and the externalities generated by a chance to move later to C or return to A with general human capital are excluded. [...] Figure 2. Immigration Decision-Making Tree Stay at A Ret A Based on the assum decision-making process illus Citizen of AStage 1 Move To B Stage 2.1 urn to A Ascension to Citizenship (B) Stage 2.2 Stay at B Move To C Stage 3.1 Return to B Ascension To Citizenship (C) Stage 3.2 Return to A Stay at C B C ptions above, people in A are ready to engage at most in a 3-stage trated by Figure 2. 6 Stage 1. [...] After the second period, she is qualified to join the labour market in B and draw a job (with wage w) randomly and assume w follows the cdf F(w, I) with the property of ∂F (w, I ) < 0 , that is, F (w, I 2 ). is first order stochastic dominant over F (w, I1 ). if I > I. This ∂I 2 1 property captures the fact that smarter people will have a higher probability of obtaining a high wage job.