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Domestic Distortions, Imperfect Information, and the Brain Drain

Bhagwati, Jagdish N.; Hamada, Koichi

An earlier paper by Bhagwati and Hamada (1974) presented a theoretical analysis of the brain drain in the context of wage rigidity and unemployment. This paper extends the analysis by modifying the model to incorporate the phenomena of overqualification, internal diffusion of labor from urban to rural areas and imperfect information about the quality of labor. The welfare effect of the brain drain in the presence of these phenomena is analyzed.



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Also Published In

Journal of Development Economics

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February 4, 2013
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