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International Mobility of the Highly Skilled, Endogenous R&D, and Public Infrastructure Investment

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Author Info
Grossmann, Volker () (University of Fribourg)
Stadelmann, David () (University of Fribourg)

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Abstract

This paper theoretically and empirically analyzes the interaction of emigration of highly skilled labor, an economy’s income gap to potential host economies of expatriates, and optimal public infrastructure investment. In a model with endogenous education and R&D investment decisions we show that international integration of the market for skilled labor aggravates between-country income inequality by harming those which are source economies to begin with while benefiting host economies. When brain drain increases in source economies, public infrastructure investment is optimally adjusted downward, whereas host economies increase it. Evidence from 77 countries well supports our theoretical hypotheses.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3366.

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Date of creation: Feb 2008
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Handle: RePEc:iza:izadps:dp3366

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Related research
Keywords: R&D investment public infrastructure investment educational choice cross-country evidence brain drain

Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General
H40 - Public Economics - - Publicly Provided Goods - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Grossmann, Volker, 2008. "Entrepreneurial Innovation and Sustained Long-Run Growth without Weak or Strong Scale Effects," IZA Discussion Papers 3389, Institute for the Study of Labor (IZA). [Downloadable!]
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  2. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A brain gain with a brain drain," Economics Letters, Elsevier, vol. 55(2), pages 227-234, August. [Downloadable!] (restricted)
  3. Jean-Christophe Dumont & Georges Lemaître, 2005. "Counting Immigrants and Expatriates in OECD Countries: A New Perspective," OECD Social Employment and Migration Working Papers 25, OECD Directorate for Employment, Labour and Social Affairs. [Downloadable!]
  4. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November. [Downloadable!] (restricted)
  5. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A Brain Gain with a Brain Drain," Economics Series 45, Institute for Advanced Studies. [Downloadable!]
  6. Miyagiwa, Kaz, 1991. "Scale Economies in Education and the Brain Drain Problem," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 743-59, August. [Downloadable!] (restricted)
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  7. Laudeline Auriol, 2007. "Labour Market Characteristics and International Mobility of Doctorate Holders: Results for Seven Countries," OECD Science, Technology and Industry Working Papers 2007/2, OECD Directorate for Science, Technology and Industry. [Downloadable!]
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