International Migration of the Highly Skilled: A Case Study on Human Capital Mobility

The brain drain problem continues to attract the interest of economists. One of the major implications of brain drain is the loss of human capital from developing countries, where human capital is most needed but scarce, toward developed countries where human capital is already abundant. Then public investment in human capital may not lead to higher economic growth in developing countries. To understand how brain drain impacts developing and developed countries, in this study we present a case study where migration of the highly skilled from India to the U.S. took place during the high technology boom in the 1990s. In this particular case, international migration of the highly skilled resulted in a “brain drain,” satisfying the increased demand for skilled labor in the U.S., but causing fiscal as well as human capital losses in India. We may reasonably conclude that the North benefits but the South hurts as a result of migration of the highly skilled.