The international migration literature has highlighted four key stylized facts from the perspective of the source country: (i) Migration rates are notably high, with some nations seeing over ten percent of their population living abroad. (ii) Certain developing countries have witnessed a significant exodus of skilled workers, commonly referred to as brain drain, spanning several decades. (iii) Migrants often maintain strong ties to their country of origin, evidenced by the substantial remittances they send back to their relatives. (iv) Migration is not necessarily permanent, as a considerable number of individuals return to their home country after a period spent abroad. In this paper, we present a theoretical model that endogenously explains these facts. Our model allows us to explore key issues in migration literature from a theoretical standpoint. We analyze the general equilibrium effects of migration, its long-term implications, and its welfare consequences. Additionally, we investigate whether the combined impact of return migration and remittances can counterbalance the effects of skilled migration. Finally, we evaluate the efficacy of policy interventions designed to mitigate the adverse effects of brain drain.

International migration represents a potential channel for the transmission of norms, attitudes, and values back to the home countries. In this paper, we explore how international migration affects tax morale and aversion to the free-riding of members of the household left behind in the home country. We use a rich longitudinal household-level database on Polish society (period 2007–2015) that allows us to observe social attitudes and values of individuals before and after the actual migration of a member of the household. We find that having a migrant in the household has a significant and positive effect on tax morale and increases aversion toward free-riding of stayers. We also find that migrants have a lower level of tax morale before departure compared to stayers, suggesting that international migration leads to an overall gain in pro-social behaviors.

Greater labor migration can establish more channels for information flows, directly contributing to faster economic growth and improved innovation and work. It can also expand international remittances, which can be invested by recipient households in home countries in education, entrepreneurship, and improved and sustainable agricultural technologies. At the same time, however, increased emigration of medical professionals and technical workers from poor countries can reduce quality of local services, innovation, health status, and productivity. This analysis attempts to quantify the economic benefits and costs of permitting an immediate 10% increase in the bilateral migration of skilled workers (physicians, engineers or science, engineering, technology, and mathematics workers, and other persons with advanced educations) among the nations of the African Continental Free Trade Area and, more broadly, among 25 global regions. Economic benefits include higher migrant incomes abroad, welfare gains in destination countries associated with higher economic efficiency, spillover productivity gains, and an improved ability of the younger and more skilled working force to support the needs of the wider population, resulting in higher national production. Benefits in source countries include productivity enhancements from two sources: (a) greater access to knowledge associated with more bilateral trade and investment and (b) the ability of local households to invest remittances in productivity-enhancing activities. Welfare losses in source nations include static efficiency reductions and a worsened demographic support capability. In Africa, the benefit-cost ratios range from 3.7 to 6.9; in the global analysis, 17 to 38.

This work examines the interaction between demographic features and environmental constraints in Caribbean small island developing states. Specifically, it aims to clarify human capital dynamics when migration and environmental quality matter. To do so, two main ingredients are introduced in an overlapping generations model: countries may benefit from migration through a brain gain or remittances, and production emits pollution that hinders the accumulation of human capital. Two cases emerge from the analysis. In the first case, an environmental policy is sufficient to correct the externality, and migration should stay at a relatively low level. In the second case, if pollution emissions are high relative to the effectiveness of environmental policy, migration leads to an increase in per capita output and human capital. This only happens if the emigration rate is already high, because it leads to a reduction in demographic pressure on the environment.

This paper investigates whether remittance inflows reduce the elasticity of government size with respect to trade openness. Put differently, the paper tests the hypothesis that there is a partial substitution between public insurance through government spending and a private insurance through remittances in more open countries. The insurance role of remittances is evaluated by computing annual panel data coefficients of remittance cyclically with respect to the real GDP cycle. It appears that remittances have become more countercyclical during the end 1990s. Moreover, the trade openness, natural disasters, inflation and the shallowness nature of the financial system are among the main determinants of the countercyclicality of remittance inflows. From a simple theoretical model close to Rodrik (1998) and on the basis of econometric estimations using a large sample of developing countries (66), it appears that the positive impact of trade openness on government spending decreases with the level of remittances received. Moreover, it is when remittances are effectively countercyclical that the mechanism described here works.