This paper develops a signaling theory where brain drain as well as the opposite of brain drain, a phenomenon we call “lame-drain” can result. In particular, we assume there are three types of agents according to their intrinsic abilities; education (with endogenous intensity) consists of...

The traditional Hechscher-Ohlin theory fails to explain the brain drain problem in which high talent immigrants flow from less developed countries to developed countries. This paper offers an interpretation of the brain drain paradox with a signaling model. We show that in a North-South...