Economics of the Brain Drain: The Case for a Tax on Brains

Abstract

The phenomenon of ‘brain drain’ refers to the migration of skilled people from the developing to the developed countries. It has stimulated a vast literature and economists are sharply divided on the costs and benefits of such migration to developing countries. They have also come up with ingenious and novel policy prescriptions, such as the imposition of a tax on the incomes of skilled immigrants, designed to benefit the developing countries. This paper reviews the debate on the ‘brain drain’ in the context of India’s experience, and analyses the justification for and viability of a tax on the incomes of skilled immigrants resident in the developed countries.