Migration probability as an incentive for human capital accumulation when information is asymmetric

This paper demonstrates the significant role of a migration probability on the premigration level of human capital accumulation in the source country. The study suggests that the opportunity to migrate to another, superior technology country, may well lead to a ”brain gain” for the prospective migrants. Adversely, since the individuals face an opportunity to migrate illegally when the legal status is refused, an information asymmetry arises. Because in many countries laws are not enforced against visibly present illegal immigrants, the information symmetry between the social planner in the source country and the rest of the world cannot be reinstated efficiently. This mismatch leads to a ”brain drain” in the source country from the social point of view.