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2008 AEC - Is the Brain Drain Good for Africa?
We build upon recent literature to do several exercises to assess benefits and costs of the brain drain to Africa. Contrary to a lot of the worries expressed in the media and in aid agencies, the Brain drain is probably a net benefit to the source countries. We make several arguments: (1) the African brain drain is not large enough to have much effect on Africa’s skill gap relative to the rest of the world. Since other regions had a larger brain drain, the skill gap between Africa and the rest would actually be larger in a counterfactual world of NO brain drain with the same amount of skill creation. (2) The gains to the migrants themselves and their families who receive indirect utility and remittances more than offset the losses of the brain drain. According to one of our calculations, the present value of remittances more than covers the cost of educating a brain drainer in the source country. (3) Brain drain has a positive effect on skill accumulation that appears to offset one for one the loss of skills to the brain drain. Hence it is not surprising that we fail to identify any negative growth effect of the brain drain. Although some of our exercises are reliant on special assumptions and shaky data that require further investigation, we conclude based on what we can know in this paper that the brain drain is on balance good for Africa1 .