Quality assurance program and brain drain

The number of colleges and universities in most developing countries has increased drastically over the past decades. The quality variation of these institutions is an alarming concern. Quality assurance programs are proposed and implemented. This paper evaluates the effects of quality assurance on the demand for college education, study abroad, and the brain drain. It is found that, by reducing the quality uncertainty, the assurance program depresses the incentives for the less able individuals to take a gamble on studying abroad (which, in turn, reduces the demand for college education). The brain drain problem is therefore alleviated. If originally few individuals opt for study abroad, the adverse effect on the demand for college education is small. On the other hand, by improving the average quality, the assurance program promotes the demand for college education. This positive effect will dominate the above negative effect, leading to a net increase in demand. By contrast, if originally there are many individuals choosing to study abroad, the demand for college education will decrease after the quality assurance program is in place. Finally, the effect on social welfare cannot be unambiguously determined. It depends upon the rate of return migration.