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Chapter 26 The New Economy and the Impact of Immigration
and the Brain Drain Recent years have witnessed an intense debate on the extent and consequences of brain drain migration. It is particularly the smaller countries who tend to become deprived more and more of some of their best talents. Moreover, there are active recruitment policies for highskilled workers in operation in major advanced economies. The intensified flows of highly skilled migrants have been associated with the emergence of skill-biased technical change in the developed labor markets, which in turn is frequently viewed as a consequence of the rising diffusion of information and communication technologies (ICT). Beyond the necessity of predicting these trends into the future, their effects are relatively unclear. The loss of educated workers tends to harm origin countries, but the possibility for future migration might provide an incentive for increased accumulation of human capital. This may be as beneficial as migrant remittances and the effects of return migration of skilled workers. Finally, the presence of high-skilled workers may have considerable implications for the speed of ICT diffusion and more generally for economic growth. This chapter reviews the current theoretical literature and examines the available empirical evidence to provide a balanced perspective on these issues. |