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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
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Handle: RePEc:ctl:louvre:2008031

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Keywords: Education; Brain Drain;

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  1. Acemoglu, D., 1994. "Search in the Labor market: Incomplete Contracts and Growth," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 94-23, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. DOCQUIER, Frédéric & FAYE, Ousmane & PESTIEAU, Pierre, . "Is migration a good substitute for education subsidies?," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -2022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Stark, Oded & Wang, Yong, 2001. "Inducing Human Capital Formation: Migration as a Substitute for Subsidies," Economics Series, Institute for Advanced Studies 100, Institute for Advanced Studies.
  4. Eckard Janeba, . "Tax Competition in Imperfectly Competitive Markets," Discussion Paper Serie A, University of Bonn, Germany 513, University of Bonn, Germany.
  5. Benoit Mulkay & Bronwyn H. Hall & Jacques Mairesse, 2000. "Firm Level Investment and R&D in France and the United States: A Comparison," NBER Working Papers 8038, National Bureau of Economic Research, Inc.
  6. Cooper, Russell & John, Andrew, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 103(3), pages 441-63, August.
  7. Guido Cozzi, 2003. "The Self-fulfilling International Allocation of Innovation," Levine's Bibliography 666156000000000189, UCLA Department of Economics.
  8. 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.
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