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Consumers and the Brain Drain: Product Design and the Gains from Emigration

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Author Info

  • Kuhn, Peter J.

    ()
    (University of California, Santa Barbara)

  • McAusland, Carol

    ()
    (University of British Columbia, Vancouver)

Abstract

We consider the welfare effects of skilled worker emigration in a context where skilled labor plays a role in product 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 abroad than at home.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3602.

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Length: 17 pages
Date of creation: Jul 2008
Date of revision:
Publication status: published in: Journal of International Economics, 2009, 78(2), 287–291
Handle: RePEc:iza:izadps:dp3602

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Keywords: product quality; international labor migration; brain drain;

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References

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  1. Gene Grossman & Edwin L.-C. Lai, 2002. "International Protection of Intellectual Property," NBER Working Papers 8704, National Bureau of Economic Research, Inc.
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  4. Bhagwati, Jagdish & Rodriguez, Carlos, 1975. "Welfare-theoretical analyses of the brain drain," Journal of Development Economics, Elsevier, Elsevier, vol. 2(3), pages 195-221, September.
  5. Peter J. Kuhn & Carol McAusland, 2006. "The International Migration of Knowledge Workers: When is Brain Drain Beneficial?," NBER Working Papers 12761, National Bureau of Economic Research, Inc.
  6. Alexander Haupt & Eckhard Janeba, 2009. "Education, redistribution and the threat of brain drain," International Tax and Public Finance, Springer, Springer, vol. 16(1), pages 1-24, February.
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  8. Rivera-Batiz, Luis A & Romer, Paul M, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 106(2), pages 531-55, May.
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  13. Bhagwati, Jagdish & Hamada, Koichi, 1974. "The brain drain, international integration of markets for professionals and unemployment : A theoretical analysis," Journal of Development Economics, Elsevier, Elsevier, vol. 1(1), pages 19-42, April.
  14. Miyagiwa, K., 1989. "Scale Economics In Education And The Brain Drain Problem," Discussion Papers in Economics at the University of Washington, Department of Economics at the University of Washington 89-09, Department of Economics at the University of Washington.
  15. Robert H. McGuckin & Robert Inklaar & Bart van Ark & Sean M. Dougherty, 2004. "The Structure of Business R&D: Recent Trends and Measurement Implications," Economics Program Working Papers, The Conference Board, Economics Program 04-01, The Conference Board, Economics Program.
  16. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human Capital Depletion, Human Capital Formation, and Migration. A Blessing in a "Curse"?," Economics Series, Institute for Advanced Studies 55, Institute for Advanced Studies.
  17. Mountford, A., 1995. "Can a brain drain be good for growth?," Discussion Paper, Tilburg University, Center for Economic Research 1995-8, Tilburg University, Center for Economic Research.
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Cited by:
  1. McAusland, Carol & Kuhn, Peter, 2011. "Bidding for brains: Intellectual property rights and the international migration of knowledge workers," Journal of Development Economics, Elsevier, Elsevier, vol. 95(1), pages 77-87, May.
  2. Vasilakis, Chrysovalantis, 2013. "Globalized Market for Talents and Inequality: What Can Be Learnt from European Football?," The Warwick Economics Research Paper Series (TWERPS) 1034, University of Warwick, Department of Economics.

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