ABSTRACT
This chapter focuses on skilled emigrants from small island nations who are likely to number in the thousands implies that the wage effects in host nations are likely to be small. A simple model to rationalize the differences in wages due to differences in the size of markets in small vis-a-vis large countries is presented next. Taking the simulations at face value to begin with does not necessarily imply deterioration in welfare of those left behind at source. 'Brain drain' is quantified as the emigration of tertiary-trained workers from developing to developed nations, an issue that has attracted considerable academic attention. Amongst the special problems faced by small nations are the limited ability to reap the benefits of economies of scale in the production of goods and services. The global market provides the opportunity for small states to diversify their risks from domestic production and local income-generation.
