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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;

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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!]
    Other versions:
  2. Davidson, R. & MacKinnon & J.G., 1999. "Artificial Regressions," G.R.E.Q.A.M. 99a04, Universite Aix-Marseille III.
    Other versions:
  3. Jones, Charles I., 2005. "Growth and Ideas," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 16, pages 1063-1111 Elsevier. [Downloadable!] (restricted)
    Other versions:
  4. 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)
  5. Michel, BEINE & FrŽdŽric, DOCQUIER & Hillel, RAPOPORT, 2006. "Brain drain and human capital formation in developing countries : winners and losers," Discussion Papers (ECON - Département des Sciences Economiques) 2006023, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
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  6. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February. [Downloadable!] (restricted)
  7. 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!]
  8. Panu Poutvaara & Vesa Kanniainen, 2000. "Why Invest in Your Neighbor? Social Contract on Educational Investment," International Tax and Public Finance, Springer, vol. 7(4), pages 547-562, August. [Downloadable!] (restricted)
  9. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November. [Downloadable!] (restricted)
  10. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A Brain Gain with a Brain Drain," Economics Series 45, Institute for Advanced Studies. [Downloadable!]
  11. Andersson, Fredrik & Konrad, Kai A., 2003. "Human capital investment and globalization in extortionary states," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1539-1555, August. [Downloadable!] (restricted)
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  12. 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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  13. Saint-Paul, Gilles, 2004. "The Brain Drain: Some Evidence from European Expatriates in the United States," IZA Discussion Papers 1310, Institute for the Study of Labor (IZA). [Downloadable!]
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  14. 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!]
  15. Hartmut Egger & Josef Falkinger & Volker Grossmann, 2007. "Brain Drain, Fiscal Competition, and Public Education Expenditure," IZA Discussion Papers 2747, Institute for the Study of Labor (IZA). [Downloadable!]
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Cited by:
(explanations, 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. Rosalind S Hunter, 2009. "The Elite Brain Drain," Working Papers id:2048, esocialsciences.com. [Downloadable!]
  2. Hunter, Rosalind S. & Oswald, Andrew J. & Charlton, Bruce G., 2009. "The Elite Brain Drain," IZA Discussion Papers 4005, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
    • RosalindS. Hunter & AndrewJ. Oswald & BruceG. Charlton, 2009. "The Elite Brain Drain," Economic Journal, Royal Economic Society, vol. 119(538), pages F231-F251, 06. [Downloadable!] (restricted)
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