Brain Drain - A Management or Property Problem?

Brain drain occurs when skilled individuals leave their native countries. It is often argued that this phenomenon has strong negative effects on the origin countries, preventing them to capture the advantage of investing in human capital formation and realize a higher growth. This analysis shows that the negative consequences of brain drain have been overemphasized, mainly because of the confusion between capital and technology. It demonstrates that investments in human capital are possible and profitable on a free market. State intervention in education is responsible for the systematic misallocation of human capital, in general, and for brain drain in particular