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Does international mobility of high-skilled workers aggravate between-country inequality?

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  • Grossmann, Volker
  • Stadelmann, David

Abstract

This paper analyzes the interaction of international migration of high-skilled labor and relative wage income between source and destination economies of expatriates. We develop an overlapping-generations model with increasing returns which suggests that international integration of the market for skilled labor aggravates between-country inequality by harming those which are source economies to begin with while benefiting host economies. The result is robust to allowing governments to optimally adjust productivity-enhancing investments which could potentially attenuate brain drain. Optimal public investment tends to decrease in response to higher emigration.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 95 (2011)
Issue (Month): 1 (May)
Pages: 88-94

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Handle: RePEc:eee:deveco:v:95:y:2011:i:1:p:88-94

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Web page: http://www.elsevier.com/locate/devec

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Keywords: Brain drain Between-country wage differences Public investment Total factor productivity;

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References

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Cited by:
  1. Grossmann, Volker & Stadelmann, David, 2012. "Does High-Skilled Migration Affect Publicly Financed Investments?," IZA Discussion Papers 6610, Institute for the Study of Labor (IZA).
  2. Harald Fadinger & Karin Mayr, 2011. "Skill-biased technological change, unemployment and brain drain," Vienna Economics Papers 1108, University of Vienna, Department of Economics.
  3. Volker Grossmann & Andreas Schäfer & Thomas Steger, 2013. "Migration, Capital Formation, and House Prices," CESifo Working Paper Series 4146, CESifo Group Munich.
  4. Frédéric DOCQUIER & Hillel RAPOPORT, 2011. "Globalization, brain drain and development," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011009, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  5. Grossmann, Volker & Stadelmann, David, 2012. "Wage Effects of High-Skilled Migration: International Evidence," IZA Discussion Papers 6611, Institute for the Study of Labor (IZA).

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