Gaurav Khanna Publications

How does emigration of highly educated citizens of low-income countries to high-income countries affect the economies of the origin countries? The direct effect is “brain drain”—a decrease in the country’s human capital stock. However, there may also be indirect “brain gain” effects. This review summarizes evidence that uses causal inference methods to reveal mechanisms that may lead to brain drain, gain, or circulation. Collectively, the weight of the evidence suggests that migration opportunities often increase human capital stock in origin countries and produce downstream beneficial effects through remittances; foreign direct investment and trade linkages; transfers of knowledge, technology and norms; and return migration. We discuss conditions under which benefits from skilled migration may outweigh costs and also describe potential research paths to inform policy.

We quantify how pollution affects aggregate productivity and welfare in spatial equilibrium. We show that skilled workers in China emigrate away from polluted cities. These patterns are evident under various empirical specifications, such as when instrumenting for pollution using upwind power plants, or thermal inversions. Pollution changes the spatial distribution of skilled and unskilled workers, and wage returns by location. We quantify the loss in aggregate productivity due to this re-sorting by estimating a spatial equilibrium model. Counterfactual simulations show that reducing pollution increases productivity through spatial re-sorting by approximately as much as the direct health benefits of clean air.