Can 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.
The challenge of sustaining economic growth over the long term is one that only a few countries have been able to surmount. Slowing momentum in countries like Malaysia and Thailand has led analysts and policy makers to consider what it would take to lift them out of middle-income status, where other countries have arguably become stuck. The paper examines the role of human capital formation in the quest to sustain economic growth in these two countries. It argues that a good education system is fundamental to equip workers with marketable skills. Malaysia and Thailand have successfully expanded access to schooling, but the quality of education remains an issue. Modern education systems should aim to provide universally-available quality education using the following policies: prioritize budgets to deliver quality and universally-available basic education before expanding higher levels of schooling; provide appropriate incentives and rewards to teachers; permit school autonomy and ensure accountability for results; invest in early childhood development; and consider implementing income-contingent loan financing schemes to expand higher education.
This paper considers the relationship
between institutional quality, educational outcomes, and
economic performance. More specifically, it seeks to
establish the linkages by which government effectiveness
affects per capita income, via its mediating effect on human
capital formation. The empirical approach adopts a two-stage
strategy that estimates national-level educational
production functions that include government effectiveness
as a covariate, and then uses these estimates as instruments
for human capital in cross-country regressions of per capita
income. The results identify a significant and positive
effect of human capital on per capita income levels, and
partially resolves the inconsistency between macro- and
micro-level studies of the effect of human capital on
income. The results also remain robust to alternative
specifications, extension to a panel setting, subsamples of
the data, and fully endogenous institutions.
This paper considers a setting in which the acquisition of human capital entails a change of location in social space that causes individuals to revise their comparison groups. Skill levels are viewed as occupational groups, and moving up the skill ladder by acquiring additional human capital, which in itself is rewarding, leads to a shift in the individual’s inclination to compare himself with a different, and on average better-paid, comparison group, which in itself is penalizing. The paper sheds new light on the dynamics of human capital formation, and suggests novel policy interventions to encourage human capital formation in the aggregate and, at the same time, reduce inter-group income inequality.
This paper develops a one sector, two-input model with endogenous human capital formation. The two inputs are two types of skilled labor: “engineering,” which exerts a positive externality on total factor productivity, and “law”, which does not. The paper shows that a marginal prospect of migration by engineers increases human capital accumulation of both types of workers (engineers and lawyers), and also the number of engineers who remain in the country. These two effects are socially desirable, since they move the economy from the(inefficient) free-market equilibrium towards the social optimum. The paper also shows that if the externality effect of engineering is sufficiently powerful, everyone will be better off as a consequence of the said prospect of migration, including the engineers who lose the migration “lottery”, and even the individuals who practice law.
Not only the colonial period, but also the pre-colonial times might have influenced later development patterns. In this study we assess a potential “pre-colonial legacy” hypothesis for the case of the Andean region. In order to analyze the hypothesis, we study the human capital of Inca Indios, using age-heaping-based techniques to estimate basic numeracy skills. We find that Peruvian Inca Indios had only around half the numeracy level of the Spanish invaders. The hypothesis holds even after adjusting for a number of potential biases. Moreover, the finding has also crucial implications for the narrative of the military crisis of the Inca Empire. A number of explanations have been given as to why the Old American Empires were not able to defend their territory against the Spanish invaders in the early 16th century. We add an economic hypothesis to the debate and test it with new evidence: Were the human capital formation efforts of the Inca economy perhaps too limited, making it difficult to react appropriately to the Spanish challenge?
In the model of Stark et al. (1997, 1998), the possibility of employment in a developed country raises the level of human capital acquired by workers in the developing country. We show that this result holds even when workers have the option to save.
This dissertation project address fundamental question in anthropometric history in the Muslim World. The thesis comprises four sections that are intended for separate publication. Two of these sections are co-authored. Each of the manuscripts represents a single chapter. The ultimate product of this thesis is a series of research papers describing the long-run development.
The collection began with an article published in the journal Exploration in Economic History in 2009 with Jörg Baten. This article provides height trends for eight Middle Eastern countries from 1850-1910. This section highlights some of the differences in height development in the Muslim world.
The second section of the thesis examines anthropometric data for Indonesia, which has the largest Muslim population in the world. We found three distinct phases in the long-run trend in Indonesian mean heights. The first phase involved a significant decline in 1870s, the second involved a modest increase over the next three decades and the third phase involved accelerating height growth after World War II.
The third section of the thesis emphasizes particular resource related aspects. Natural resource revenues increase wealth and purchasing power; hence, an abundance of resources may be expected to raise an economy’s investment...
This paper studies the growth dynamics of a developing country under migration. Assuming that human capital formation is subject to a strong enough, positive intertemporal externality, the prospect of migration will increase growth in the home country in the long run. If the external effect is less strong, there exists at least a level effect on the stock of human capital in the home country. In either case, the home country experiences a welfare gain, provided that migration is sufficiently restrictive. These results, obtained in a dynamic general equilibrium setting, extend and strengthen the results of Stark and Wang (2002) obtained in the context of a static model.
This thesis highlights the formation of human capital in the European regions and its implications for economic growth. It is characterised by its combined regional, long-term and European approach. To this end, I refer to Unified Growth Theory and New Economic Geography as the most important recent theoretical contributions and construct an unparalleled new and large database on regional human capital and other economic factors from numerous diverse sources. For the empirical analysis, spatial and GIS methods are employed in addition to standard econometric models. In this way, the thesis explores human capital formation in the regions of the European continent between 1790 and 2010. Moreover, it underlines the relationship between human capital proxies, the determinants of human capital and the long-run impact of human capital on economic growth.; Die Dissertation zeigt auf regionaler Ebene die Bildung von Humankapital in Europa und ihre Bedeutung für das Wirtschaftswachstum. Sie ist gekennzeichnet durch ihren kombinierten regionalen, langfristigen und europäischen Ansatz. Zu diesem Zweck wird auf die sog. Unified Growth Theory und die Neue Ökonomische Geographie als den bedeutendsten neueren theoretischen Beiträgen Bezug genommen und eine neue große Datenbasis der Bildung von Humankapital und anderer Faktoren aus einer Vielzahl von unterschiedlichen Quellen erstellt. Für die empirische Analyse werden neben den üblichen ökonometrischen Modellen ebenfalls räumliche und GIS-Methoden verwendet. Auf diese Weise untersucht die Dissertation die Bildung von Humankapital in den Regionen des europäischen Kontinents zwischen 1790 und 2010. Zudem hebt sie die Beziehung zwischen Humankapital-Indikatoren...
That human capital is a core driving factor for economic growth has become eminent at least since the emergence of endogenous growth theories and especially since Unified Growth Theory. It not only increases individual and aggregate productivity but probably also improves the quality of institutions, which in turn affects economic growth. Education of women has been linked to reduced child mortality and to a better health status of the family. On the other hand, the discrimination of the poorer section of the population in the access to education reduces their opportunities on the labour market, making social mobility difficult and perpetuating income inequality. Human capital and its distribution plays an important role in explaining global differences in wellbeing and growth trajectories. But data that allows to test those links empirically for the very long run is scarce and more so for Latin America. One contribution of this thesis is the construction of databases that include human capital measures for regions and historical times that are understudied. Assessing the reasons why governments and individuals invest into human capital is another one. This cumulative thesis consists of five chapters related to human capital, mostly in the Iberian world. It addresses important topics that can be relevant also from today’s perspective. The questions raised are...
Brain Circulation between the European Union (EU) and Sub-Saharan Africa is a crucial ingredient in
Human Capital formation in the latter. A major constraint to African development is the very low base
of skilled and highly educated workers and professionals. The production of skilled workers has been
low, and only recently has seen a dramatic increase. Recent papers by many authors have indicated
that a channel for human capital growth has been, paradoxically, the possibility of the brain drain
which serves as both an incentive mechanism and which results in higher human capital when the
drainers return. After a review of some of the literature, these insights are applied to the debates raging
today on European Union migration policy: the Blue Card, Migration Con-tracts, anti-Brain Drain
legislation, etc. This paper argues that a careful calibration of the EU policies may enable faster
Human Capital growth in Africa, while, at the same time, being beneficial to the EU by supplying
critically needed skills into the EU economy. By carefully planning the production of human capital
and the consequent flow of skilled migrants into Europe, the EU can assist in the development of
vitally needed numbers of trained or skilled workers in Africa.; European Report on Development
Thesis (Ph.D.) - Indiana University, Economics, 2009; This dissertation investigates three topics related to migration and human capital formation in developing countries. The first essay attempts to determine the conditions under which exposure to international migration can have a positive effect on economic growth. Numerical simulations show that the lower the contribution of private investment in education to human capital accumulation in the source countries, the higher the likelihood that exposure to international migration negatively impacts economic growth if migration is sufficiently high. The level of efficient government expenditure on education is higher for an economy with migration than for an economy without migration only if migration has a positive effect on growth. The second essay analyzes the determinants of remittances using household data from Ecuador. It provides empirical evidence as follows: remittances and household migration size are non-monotonically related, remittances are altruistically motivated, the size of remittances decreases with time after migration and the Ecuadorian migrants who moved to the U.S. are more likely to remit and to remit more than those who moved to other countries. The third essay of this dissertation combines data from the 2002 National Population Census and the distribution of the number of victims and human rights violations across 22 departments to examine how the worst period of the civil war in Guatemala...
The first scientific paper, chapter two focuses on human capital as an important determinant of living standards. Human capital is proxied with the age-heaping technique. Additionally in this article, literacy evidence is provided to cross-check the results. As an indicator of the biological standard of living, human stature is used. The chapter provides a large data set on Portuguese living standards from the early 18th to the 20th centuries. It answers the question: When and why did the Portuguese become the shortest Europeans? In order to find the answer to this question, the trend in Portuguese living standards from the 1720s until recent times is estimated with Maximum Likelihood and OLS techniques. The data shows that during the early nineteenth century average height in Portugal did not differ significantly from average height in most other European countries. But when around 1850, their anthropometric values began to climb sharply, Portugal's, however, did not. In OLS and IV panel estimations, delays in both real-wage convergence and human capital formation in Portugal are found to be the main factors hindering any improvement there in the biological standard of living.
Chapter three provides data on human capital development for seven Latin Ameri-can countries from the 17th to the 20th centuries...
Conditional cash transfers are programs
under which poor families get a stipend provided they keep
their children in school and take them for health checks.
Although there is significant evidence showing that they
have positive impacts on school participation, little is
known about the long-term impacts of the programs on human
capital. This paper investigates whether cohorts of children
from poor households that benefited up to nine years from
Familias en Acción, a conditional cash transfer program in
Colombia, attained more school and performed better on
academic tests at the end of high school. Identification of
program impacts is derived from two different strategies
using matching techniques with household surveys, and
regression discontinuity design using a census of the poor
and administrative records of the program. The authors show
that, on average, participant children are 4 to 8 percentage
points more likely than nonparticipant children to finish
high school, particularly girls and beneficiaries in rural
areas. Regarding long-term impact on tests scores...
Rapid population growth in many
developing countries has raised concerns regarding food
security and household welfare. To understand the
consequences of population growth in a general equilibrium
setting, this paper examines the dynamics of population
density and its impacts on household outcomes. The analysis
uses panel data from Indonesia combined with district-level
demographic data. Historically, Indonesia has adapted to
land constraints through a mix of agricultural
intensification, expansion of the land frontier, and nonfarm
diversification, with public policies playing a role in
catalyzing all of these responses. In contemporary
Indonesia, the paper finds that human capital determines the
effect of increased population density on per capita
household consumption expenditure. On the one hand, the
effect of population density is positive if the average
educational attainment is high (above junior high school),
while it is negative otherwise. On the other hand, farmers
with larger holdings maintain their advantage in farming
regardless of population density. The paper concludes with
some potential lessons for African countries from
Indonesia's more successful rural development experiences.
Recent empirical studies question
conventional wisdom about the importance of education to
growth. These results partly reflect how international
differences in the quality of education systems--defined by
the systems' ability to produce one marginal unit of
productive human capital--are not taken into account. The
author estimates neoclassical growth models on panel data in
which the elasticity of human capital depends stochastically
on different characteristics of the education system. Among
characteristics that explain differences in quality are
education infrastructure, the initial endowment of human
capital, and the ability to distribute educational services
equally among potential students. Giving priority to primary
education for all rather than secondary education to a few
is more likely to foster growth (for the same fiscal
burden). But parallel actions are also probably needed--for
example, promoting institutions that motivate skilled
workers to spend time on growth-promoting activities and
encouraging the inflow of foreign technologies to maximize
the social return to public investment in education.
We revisit a recently introduced agent model [ACS 11, 09 (2008)], where eco¬nomic growth is a consequence of education (human capital formation) and innova¬tion, and investigate the influence of the agents1 social network, "both on an agent's decision to pursue education and on the output of new ideas. Regular and random networks are considered. The results are compared with the predictions of a mean field (representative agent) model.
8 pages, 3 figures, 2 tables.-- PACS nrs.: 89.75-k; 89.65.Gh; 89.75.Hc; 87.23.Ge.-- Printed version published Jun 1, 2009.; ArXiv pre-print available at: http://arxiv.org/abs/0809.3418; We revisit a recently introduced agent model [ACS, 11, 99 (2008)], where economic growth is a consequence of education (human capital formation) and innovation, and investigate the influence of the agents’ social network, both on an agent’s decision to pursue education and on the output of new ideas. Regular and random networks are considered. The results are compared with the predictions of a mean field (representative agent) model.; T.A. and M.S. acknowledge support from FCT (Portugal), Project PDCT/EGE/60193/2004. T.V.M. is supported by FCT (Portugal) through Grant No.SFRH/BD/23709/2005. UECE and Centro de Física do Porto are supported by FCT (Fundação para a Ciência e a Tecnologia, Portugal), financed by ERDF and Portuguese funds.; Peer reviewed