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Brain drain is a major issue for Small Island Developing States (SIDS). Econometric analysis confirms that smallness has a strong positive impact per se on emigration rates. On average, 50 percent of the high-skilled labour force in SIDS has left their country, and the brain drain exceeds 75 percent in a few cases. In this paper, we document this phenomenon and study the bi-directional links between brain drain and development. We show that these interdependencies can be the source of multiple equilibria and that small states are much more likely to be badly coordinated than other developing countries and settle in a bad equilibrium. The reason is that their elasticity of emigration to economic performance is larger. After calibration, we identify an important number of badly coordinated SIDS and quantify the economic costs of coordination failure. These costs may exceed 100 percent of the observed GDP per capita. Badly coordinated small states require appropriate development policies aimed at retaining or repatriating their high-skilled labour force.

In this paper, we quantify the labor market effects of migration flows in OECD countries during the 1990's based on a new global database on the bilateral stock of migrants, by education level. We simulate various outcomes using an aggregate model of labor markets, parameterized by a range of estimates from the literature. We find that immigration had a positive effect on the wages of less educated natives and it increased or left unchanged the average native wages. Emigration, instead, had a negative effect on the wages of less educated native workers and increased inequality within countries.

Brain drain is a major issue for Small Island Developing States (SIDS). Econometric analysis confirms that smallness has a strong positive impact per se on emigration rates. On average, 50 percent of the high-skilled labour force in SIDS has left their country, and the brain drain exceeds 75 percent in a few cases. In this paper, we document this phenomenon and study the bi-directional links between brain drain and development. We show that these interdependencies can be the source of multiple equilibria and that small states are much more likely to be badly coordinated than other developing countries and settle in a bad equilibrium. The reason is that their elasticity of emigration to economic performance is larger. After calibration, we identify an important number of badly coordinated SIDS and quantify the economic costs of coordination failure. These costs may exceed 100 percent of the observed GDP per capita. Badly coordinated small states require appropriate development policies aimed at retaining or repatriating their high-skilled labour force.

In this paper, we simulate the long-run effects of migrant flows on wages of high-skilled and low-skilled non-migrants in a set of countries using an aggregate representation of national economies. We focus on Europe and compare the outcomes for large Western European countries with those of other key destination countries both in the OECD and outside the OECD. Our analysis builds on an improved database of bilateral stocks and net migration flows of immigrants and emigrants by education level for the years 1990 through 2000. We find that all European countries experienced a decrease in their average wages and a worsening of their wage inequality because of emigration. Whereas, immigration had nearly equal but opposite effects. These patterns hold true using a range of parameters for our simulations, accounting for the estimates of undocumented immigrants, and correcting for the quality of schooling and/or labor-market downgrading of skills. In terms of economic outcomes, it follows that prevalent public fears in European countries are misplaced; immigration has had a positive average wage effect on native workers. These concerns would be more properly focused on the wage effect of emigration.

This paper reviews the existing literature on the impact of migrants networks on the patterns of international migration. It covers the theoretical channels at stake in the global effect of the networks. It identifies the key issues, namely the impact on size, selection and concentration of the migration flows. The paper also reviews the empirical hurdles that the researchers face in assessing the importance of networks. The key issues concern the choice of micro vs a macro approach, the definition of a network, the access to suitable data and the adoption of econometric methods accounting for the main features of those data. Finally, the paper reports a set of estimation outcomes reflecting the main findings of the macro approach.

Migration flows are shaped by a complex combination of self-selection and out-selection mechanisms. In this paper, we analyze how existing diasporas (the stock of people born in a country and living in an another one) aspect the size and human-capital structure of current migration flows. Our analysis exploits a bilateral data set on international migration by educational attainment from 195 countries to 30 OECD countries in 1990 and 2000. Based on simple micro-foundations and controlling for various determinants of migration, we find diasporas increase migration flows, lower their average educational level and lead to higher concentration of low-skill migrants. Interestingly, diasporas explain majority of the variability of migration flows and selection. This suggests that, without changing the generosity of family reunion programs, education-based selection rules are likely to have moderate impact. Our results are highly robust to the econometric techniques, accounting for the large proportion of zeros and endogeneity problems