Abstract This paper aims at explaining why countries with comparable levels of education still experience notable differences in terms of R&D and innovation. High-skilled migration, ultimately linked to differences in R&D costs, might be responsible for the persistence of such a gap. In fact, in a model where human capital accumulation and innovation are strategic complements, we show that allowing labor outflows may strengthen educational incentives in the lagging economy if migration is probabilistic in nature, but at the same time reduces the share of innovative production. Income (growth) might be consequently affected, and a positive migration chance is very unlikely to act as a substitute for educational subsidies. JEL Classification: F22, O3, I2, J24.
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Find related papers by JEL classification: F22 - International Economics - - International Factor Movements and International Business - - - International Migration O3 - Economic Development, Technological Change, and Growth - - Technological Change I2 - Health, Education, and Welfare - - Education J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
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