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Should I stay or should I go? An institutional approach to brain drain


Cassar, Lea; Frey, Bruno S (2010). Should I stay or should I go? An institutional approach to brain drain. Working paper series / Institute for Empirical Research in Economics No. 489, University of Zurich.

Abstract

This paper suggests that institutional factors which reward social networks at the expenses of productivity can play an important role in explaining brain drain. The effects of social networks on brain drain are analyzed in a decision theory framework with asymmetric information. We distinguish between the role of insidership and personal connections. The larger the cost of being an outsider, the smaller is the number and the average ability of researchers working in the domestic job market. Personal connections partly compensate for this effect by attracting highly connected researchers back. However, starting from a world with no distortions, personal connections also increase brain drain.

Abstract

This paper suggests that institutional factors which reward social networks at the expenses of productivity can play an important role in explaining brain drain. The effects of social networks on brain drain are analyzed in a decision theory framework with asymmetric information. We distinguish between the role of insidership and personal connections. The larger the cost of being an outsider, the smaller is the number and the average ability of researchers working in the domestic job market. Personal connections partly compensate for this effect by attracting highly connected researchers back. However, starting from a world with no distortions, personal connections also increase brain drain.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
Dewey Decimal Classification:330 Economics
Language:English
Date:June 2010
Deposited On:29 Nov 2011 15:09
Last Modified:07 Dec 2017 09:59
Series Name:Working paper series / Institute for Empirical Research in Economics
ISSN:1424-0459
Official URL:http://www.econ.uzh.ch/wp.html

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