Farchy, Emily2012-03-192012-03-192009-02-01https://hdl.handle.net/10986/4039Can a brain drain be good for development? Many studies have established the theoretical possibility of such a brain gain. Yet it is only recently that the relaxation of data constraints has allowed for sound empirical assessments. In utilizing the dramatic policy change that accompanied European Union accession as a natural experiment, this paper is able to assuage fears of reverse causality between migration and human capital formation. The results highlight a significant impact of European Union accession on human capital formation indicating that the prospect of migration can indeed fuel skill formation even in the context of middle-income economies. And, if accompanied by policies to promote return migration, as well as a functioning credit market to enable private investment, international labor mobility could represent a powerful tool for growth.CC BY 3.0 IGOAGRICULTURAL PRODUCTIONANALYTICAL METHODSBENCHMARKBRAIN DRAINBUSINESS SCHOOLCAPITAL FLIGHTCAPITAL INVESTMENTCAPITAL STOCKSCITIZENSCOMPETITIVE MARKETSCREDIT MARKETDEREGULATIONDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSEARNINGSECONOMIC COSTSECONOMIC DEVELOPMENTECONOMIC GEOGRAPHYECONOMIC GROWTHECONOMIC STRUCTUREECONOMIC THEORYECONOMIES OF SCALEEDUCATED ADULTSEDUCATED WORKFORCEEDUCATION LEVELEDUCATIONAL ATTAINMENTSEMIGRATION POLICIESEMPLOYMENT OPPORTUNITIESENROLLMENTSENTREPRENEURIAL ACTIVITIESEXPORTSEXTERNALITYFISCAL LOSSFOREIGN DIRECT INVESTMENTFOREIGN STUDENTSFREEDOM OF MOVEMENTFUTURE GENERATIONSGDPGDP PER CAPITAGRADUATE STUDENTSGROSS ENROLLMENT RATIOHIGHER EDUCATIONHIGHER PRODUCTIVITYHUMAN CAPITALHUMAN CAPITAL FORMATIONHUMAN CAPITAL INVESTMENTHUMAN RESOURCESIMMIGRANTSIMMIGRATIONIMPACT OF MIGRATIONIMPERFECT INFORMATIONINCOMEINCREASING RETURNSINEQUALITIESINEQUALITYINTERNATIONAL BANKINTERNATIONAL MIGRANTSINTERNATIONAL MIGRATIONINTERNATIONAL MOBILITYINVESTMENT DECISIONINVESTMENT IN EDUCATIONJOB MARKETLABOR DEMANDLABOR FORCELABOR FORCE SURVEYLABOR MARKETLABOR MARKETSLABOR MOBILITYLABOR RELATIONSLEVEL OF DEVELOPMENTLEVEL OF EDUCATIONLITERATUREMARGINAL PRODUCTIVITYMARKET LIBERALIZATIONMIGRANTMIGRATIONMIGRATION DATAMIGRATION FLOWSMOTIVATIONMOVEMENT OF PEOPLEMULTIPLE EQUILIBRIANATIONAL OUTPUTNETWORK EXTERNALITIESOPPORTUNITY COSTPAPERSPOLICY CHANGEPOLICY ENVIRONMENTPOLICY RESEARCHPOLICY RESEARCH WORKING PAPERPOLITICAL ECONOMYPOSITIVE EXTERNALITIESPRIVATE INSTITUTIONSPRIVATE INVESTMENTPRODUCTIVITY GROWTHPROGRESSRENTSRESPECTRETURN MIGRATIONRISK AVERSIONSECONDARY EDUCATIONSECONDARY SCHOOLSKILL LEVELSKILL LEVELSSKILLED LABORSKILLED MIGRANTSSKILLED WORKERSSOCIAL SECURITYTERTIARY EDUCATIONTERTIARY ENROLLMENTTERTIARY LEVELTRANSPORTATIONTREATYUNEMPLOYMENTUNIONUNSKILLED WORKERSUTILITY FUNCTIONWAGESWEALTHWORKFORCEWorld Bank10.1596/1813-9450-4845