Is migration a good substitute for education subsidies ?
AbstractAssuming a given educational policy, the recent brain drain literature reveals that skilled migration can boost the average level of schooling in developing countries. This paper introduces educational subsidies determined by governments concerned by the number of skilled workers remaining in the country. The theoretical analysis shows that developing countries can benefit from skilled emigration when educational subsidies entail high .fiscal distortions. However when taxes are not too distortionary, it is desirable to impede emigration and subsidize education. The authors investigate the empirical relationship between educational subsidies and migration prospects, obtaining a negative relationship for 105 countries. Based on this result, the analysis revisits the country specific effects of skilled migration upon human capital. The findings show that the endogeneity of public subsidies reduces the number of winners and increases the magnitude of the losses.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4614.
Date of creation: 01 May 2008
Date of revision:
Population Policies; Economic Theory&Research; Access to Finance; International Migration; Emerging Markets;
Other versions of this item:
- Docquier, Frédéric & Faye, Ousmane & Pestieau, Pierre, 2008. "Is migration a good substitute for education subsidies?," Journal of Development Economics, Elsevier, vol. 86(2), pages 263-276, June.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-13 (All new papers)
- NEP-DEV-2008-09-13 (Development)
- NEP-EDU-2008-09-13 (Education)
- NEP-HRM-2008-09-13 (Human Capital & Human Resource Management)
- NEP-LAB-2008-09-13 (Labour Economics)
- NEP-MIG-2008-09-13 (Economics of Human Migration)
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