Brain drain, brain gain, and economic growth in China

- We study the effects of emigration on human capital formation and economic growth.
- Permanent emigration is conducive to the improvement of school enrollment.
- Temporary emigration has a positive effect on middle school enrollment.
- Temporary emigration does not affect high school enrollment.
- Emigration has a detrimental effect on the economic growth.

We have used Chinese provincial data (1980-2005) to examine the effects of permanent and temporary emigration on human capital formation and economic growth in source regions. First, we find that permanent emigration is conducive to the improvement of both middle and high school enrollment. In contrast, while temporary emigration has a significantly positive effect on middle school enrollment it does not affect high school enrollment. Moreover, the different educational attainments of temporary emigrants have different effects on school enrollment. Specifically, the proportion of temporary emigrants with high school education positively affects middle school enrollment, while the proportion of temporary emigrants with middle school education negatively affects high school enrollment. Finally, we find that both permanent and temporary emigration has a detrimental effect on the economic growth of source regions.