Given the many channels involved, an evaluation of the exact impact of the migration of skilled labor (the ”brain drain”) for source countries is a very complex task. As we shall advocate in this paper, most of this impact may ultimately be captured through the e¤ect of emigration on the composition of the labor force, that is, on the stock of human capital per worker remaining in the home country. Until recently, empirical attempts in this direction have been hampered by the lack of harmonized international data on migration by origin country and education level. In the absence of such empirical material, the debate has remained almost exclusively theoretical. The early ”brain drain” literature of the 1970s emphasized its negative consequences for those left behind. The main conclusions were that skilled emigration contributes to increased inequality at the international level, with the rich countries getting richer at the expense of the poorer countries. By contrast, more recent contributions ask whether the traditional negative e¤ects of the brain drain stressed in the early literature may be o¤set by possible bene...cial e¤ects arising from remittances, return migration, creation of trade and business networks, and possible incentive e¤ects of migration prospects on human capital formation at home.<sup>1</sup> In particular, a new brain drain theoretical literature has emerged around the idea that migration prospects may well foster human capital formation in developing countries even after actual emigration is netted out; this literature studies the theoretical conditions under which the overall e¤ect of the brain drain may be positive (i.e. brain drain reduces international inequality). During the last two decades, there has been a signi...cant increase in the magnitude of the brain drain. However, as recent theories show, it could be that some developing countries have experienced a social gain from this brain drain.

We ...rst summarize in Section 2 the data on the magnitude of the brain drain, and then provide new estimates on the international mobility of the highly skilled; our measures are based on immigration data collected from nearly all OECD countries for 1990 and 2000 by Docquier and Marfouk (2004). These data show that the brain drain has gained in magnitude over the period covered although substantial di¤erences remain across countries and regions. Section 3 presents the theoretical arguments of the ”new” and ”old” brain drain literatures in a fully harmonized framework: we ...rst review the early brain drain literature, and contrast it to more recent models. We also review the various channels whereby skilled migrants may impact on their home country after they have left (remittances, return migration, networks), and provide evidence on these di¤erent channels when available. Section 4 is dedicated to policy implications, with emphasis on migration policy and education policy in a context of international migration. Section 5 concludes.

> 1Grubel and Scott (1969) already mentioned the various possible feedback e¤ects of the brain drain for source countries (remittances, networks, innovation in the host country that may spillover to the origin country, etc), and argued that the short-term loss (due to intragenerational and ...scal externalities) could well be o¤set in the the long run. However, such possible feedbacks were considered too small to make a di¤erence, and the brain drain literature of the 1970s focused on its detrimental (short-term) impact.

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