Emigration Implications for Economic Growth and Human Capital Formation

Abstract

Brain drains has always been considered an ominous aspect of the developing nations, whereby talented individuals of developing nations move to settle in a developed nation in order to have better employment and growth opportunities. The debate on brain drain is inconclusive and certain authors consider it positive for developing economies due to remittances and diaspora effects; others consider it bad because of flight of skilled human resource. I used data from developing economy of Pakistan between 1979-2017 and found that although emigration has negative implications for Pakistan, remittances of expatriates contributes positively towards economic growth of country. Further, it was also found that emigration or remittances did not have any influence on human capital formation. The study concluded that emigration is not bad for developing countries and recommended that expats should be encouraged to send more remittances to Pakistan.

KEYWORDS: Brain Drain, Emigration, Remittances, Pakistan