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Brain Drain, R&D-Cost Differentials and the Innovation Gap

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  • Fabio MARIANI

    (Paris School of Economics, Université Paris 1)

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 persitence 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 strenghthen 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.

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Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (REL - Recherches Economiques de Louvain) with number 2008031.

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Length: 22
Date of creation: 01 Sep 2008
Date of revision:
Handle: RePEc:ctl:louvre:2008031

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Keywords: Education; Brain Drain;

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  1. Eckard Janeba, . "Tax Competition in Imperfectly Competitive Markets," Discussion Paper Serie A 513, University of Bonn, Germany.
  2. Benoit Mulkay & Bronwyn H. Hall & Jacques Mairesse, 2001. "Firm Level Investment and R&D in France and the United States: A Comparison," Economics Papers 2001-W2, Economics Group, Nuffield College, University of Oxford.
  3. Acemoglu, D., 1994. "Search in the Labor market: Incomplete Contracts and Growth," Working papers 94-23, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Guido Cozzi, 2003. "The Self-fulfilling International Allocation of Innovation," Levine's Bibliography 666156000000000189, UCLA Department of Economics.
  5. Cooper, Russell & John, Andrew, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, MIT Press, vol. 103(3), pages 441-63, August.
  6. Michel Beine & Frédéric Docquier & Hillel Rapoport, 2001. "Brain drain and economic growth: theory and evidence," ULB Institutional Repository 2013/10449, ULB -- Universite Libre de Bruxelles.
  7. Docquier, Frederic & Faye, Ousmane & Pestieau, Pierre, 2008. "Is migration a good substitute for education subsidies ?," Policy Research Working Paper Series 4614, The World Bank.
  8. Stark, Oded & Wang, Yong, 2001. "Inducing Human Capital Formation: Migration as a Substitute for Subsidies," Economics Series 100, Institute for Advanced Studies.
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