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Education, Redistribution, and the Threat of Brain Drain

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  • Alexander Haupt
  • Eckhard Janeba

Abstract

This paper analyzes the relationship between brain drain, human capital accumulation and individual net incomes in the presence of a redistributional tax policy, credit market constraints, administrative costs of tax collection, and lack of government commitment. We characterize how decreasing migration costs for skilled workers affect the time-consistent policies of a government that wants to shift resources from skilled to unskilled workers. In our main result we show that a decline in migration costs is Pareto improving when migration costs are high, but have ambiguous effects when these costs are low. Moreover, mobility costs and human capital accumulation are positively correlated.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10618.

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Date of creation: Jul 2004
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Publication status: published as Haupt, Alexander and Eckhard Janeba. "Education, Redistribution and the Threat of Brain Drain." International Tax and Public Finance 16, 1 (February 2009): 1-24.
Handle: RePEc:nbr:nberwo:10618

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  1. Andersson, Fredrik & Konrad, Kai A., 2001. "Globalization and Human Capital Formation," IZA Discussion Papers 245, Institute for the Study of Labor (IZA).
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  6. Kuhn, Peter J. & McAusland, Carol, 2006. "The International Migration of Knowledge Workers: When Is Brain Drain Beneficial?," IZA Discussion Papers 2493, Institute for the Study of Labor (IZA).
  7. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human capital depletion, human capital formation, and migration: a blessing or a "curse"?," Economics Letters, Elsevier, Elsevier, vol. 60(3), pages 363-367, September.
  8. Thum, Claudio & Uebelmesser, Silke, 2003. "Mobility and the Role of Education as a Commitment Device," International Tax and Public Finance, Springer, Springer, vol. 10(5), pages 549-64, September.
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  14. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A Brain Gain with a Brain Drain," Economics Series, Institute for Advanced Studies 45, Institute for Advanced Studies.
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  20. Bearse, P. & Glomm, G. & Janeba, E., 2000. "Why poor countries rely mostly on redistribution in-kind," Journal of Public Economics, Elsevier, Elsevier, vol. 75(3), pages 463-481, March.
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