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Consumers and the brain drain: Product and process design and the gains from emigration

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  • Kuhn, Peter
  • McAusland, Carol

Abstract

We consider the welfare effects of skilled worker emigration in a context where skilled labor plays a role in product or process design. We show such emigration can benefit the residents left behind, even when consumers' tastes exhibit a form of home bias. This is because emigration improves the design of goods designed by skilled emigrants but consumed in the sending country. In contrast to existing models of beneficial brain drain, our results do not require agglomeration economies, education-related externalities, remittances, return migration, or an emigration "lottery". Instead, they are driven purely by differences in market size that induce skilled emigrants to design better products or production processes abroad than at home.

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Bibliographic Info

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

Volume (Year): 78 (2009)
Issue (Month): 2 (July)
Pages: 287-291

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Handle: RePEc:eee:inecon:v:78:y:2009:i:2:p:287-291

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Web page: http://www.elsevier.com/locate/inca/505552

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Keywords: Brain drain International labor migration Product quality;

References

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  1. Miyagiwa, K., 1989. "Scale Economics In Education And The Brain Drain Problem," Working Papers 89-09, University of Washington, Department of Economics.
  2. Bhagwati, Jagdish & Hamada, Koichi, 1974. "The brain drain, international integration of markets for professionals and unemployment : A theoretical analysis," Journal of Development Economics, Elsevier, vol. 1(1), pages 19-42, April.
  3. Rivera-Batiz, Luis A & Romer, Paul M, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 531-55, May.
  4. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human Capital Depletion, Human Capital Formation, and Migration. A Blessing in a "Curse"?," Economics Series 55, Institute for Advanced Studies.
  5. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
  6. Wong, Kar-yiu & Yip, Chong Kee, 1999. "Education, economic growth, and brain drain," Journal of Economic Dynamics and Control, Elsevier, vol. 23(5-6), pages 699-726, April.
  7. Alexander Haupt & Eckhard Janeba, 2009. "Education, redistribution and the threat of brain drain," International Tax and Public Finance, Springer, vol. 16(1), pages 1-24, February.
  8. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December.
  9. Whalley, John & Xin, Xian, 2009. "Home and regional biases and border effects in Armington type models," Economic Modelling, Elsevier, vol. 26(2), pages 309-319, March.
  10. Kuhn, Peter J. & McAusland, Carol, 2006. "The International Migration of Knowledge Workers: When Is Brain Drain Beneficial?," IZA Discussion Papers 2493, Institute for the Study of Labor (IZA).
  11. Jones, Ronald W. & Coelho, Isaias & Easton, Stephen T., 1986. "The theory of international factor flows: The basic model," Journal of International Economics, Elsevier, vol. 20(3-4), pages 313-327, May.
  12. Bhagwati, Jagdish & Rodriguez, Carlos, 1975. "Welfare-theoretical analyses of the brain drain," Journal of Development Economics, Elsevier, vol. 2(3), pages 195-221, September.
  13. Berry, R Albert & Soligo, Ronald, 1969. "Some Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 778-94, Sept./Oct.
  14. Mountford, Andrew, 1997. "Can a brain drain be good for growth in the source economy?," Journal of Development Economics, Elsevier, vol. 53(2), pages 287-303, August.
  15. S. Bucovetsky, 2003. "Efficient Migration and Income Tax Competition," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(2), pages 249-278, 04.
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Citations

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Cited by:
  1. Frederic Docquier & Hillel Rapoport, 2011. "Globalization, brain drain and development," CReAM Discussion Paper Series 1108, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  2. John Gibson & David McKenzie, 2013. "Scientific Mobility and Knowledge Networks in High Emigration Countries: Evidence from the Pacific," CReAM Discussion Paper Series 1305, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  3. Carol McAusland & Peter J. Kuhn, 2009. "Bidding for Brains: Intellectual Property Rights and the International Migration of Knowledge Workers," NBER Working Papers 15486, National Bureau of Economic Research, Inc.
  4. Lutz Schneider & Alexander Kubis & D. Wiest, 2010. "Selektivität, soziale Bindung und räumliche Mobilität –Eine Analyse der Rückkehrpräferenz," IWH Discussion Papers 17, Halle Institute for Economic Research.
  5. Francine D. Blau & Lawrence M. Kahn, 2012. "Immigration and the Distribution of Incomes," NBER Working Papers 18515, National Bureau of Economic Research, Inc.
  6. Chrysovalantis VASILAKIS, 2014. "Globalized Market for Talents and Inequality: What Can Be Learnt from European Football?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2014001, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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