The Brain Drain between Knowledge Based Economies: the European Human Capital Outflows to the US

This paper uses the 1980, 1990, 2000 and 2006 U.S. micro censuses data to document the magnitude and nature of European human capital outflow to the United States. I found that while emigration is about a small number of individuals, the share of Europeans who are leaving is increasing as one moves along the educational distribution and ladder of occupations that matter the most in the knowledge economy. Next, using productivity based brain drain indices it is found that aggregate human capital conveyed by emigrants has increased since the 1990s. Finally, as a better understanding on the nature of human capital embodied in European emigrants, I show that the Europeans earn a positive wage premium relative to the US natives. Moreover, this premium is higher for the most recent expatriates cohorts, providing further evidence that the quality of European emigrants has increased.