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Externalities from International Labor Migration: Efficacy of a Brain Drain Tax in the Euro-Mediterranean Region

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Author Info
Mehmet Tosun () (Department of Economics, University of Nevada, Reno)

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Abstract

This paper uses a two-region, two-period overlapping generations model with international labor mobility to examine the efficacy of using tax policy to internalize the externalities created by international labor migration. While a brain drain tax has a substantial limiting effect on labor migration and a small negative effect on per worker growth, it is found to be a viable solution to the negative externality problem. It is also found that the brain-drain tax can raise substantial tax revenue for the SMCs which could be used to enhance human capital in the region.

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File URL: http://www.business.unr.edu/econ/wp/papers/UNRECONWP06007.pdf
File Format: application/pdf
File Function: First version, 2006
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Publisher Info
Paper provided by University of Nevada, Reno, Department of Economics & University of Nevada, Reno , Department of Resource Economics in its series Working Papers with number 06-007.

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Length: 27 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:unr:wpaper:06-007

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Postal: Mail Stop 030, Reno, NV 89557-0207
Phone: (775) 784-6450
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Web page: http://www.business.unr.edu/econ/
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Related research
Keywords: International labor mobility; brain-drain tax; population aging; overlapping generations; endogenous tax policy; Euro-Mediterranean region;

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Find related papers by JEL classification:
E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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  1. Axel Börsch-Supan & Alexander Ludwig & Joachim Winter, 2005. "Aging, Pension Reform, and Capital Flows: A Multi-Country Simulation Model," DNB Working Papers 065, Netherlands Central Bank, Research Department. [Downloadable!]
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