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Does international mobility of high-skilled workers aggravate between-country inequality?

  • Grossmann, Volker
  • Stadelmann, David

This paper analyzes the interaction of international migration of high-skilled labor and relative wage income between source and destination economies of expatriates. We develop an overlapping-generations model with increasing returns which suggests that international integration of the market for skilled labor aggravates between-country inequality by harming those which are source economies to begin with while benefiting host economies. The result is robust to allowing governments to optimally adjust productivity-enhancing investments which could potentially attenuate brain drain. Optimal public investment tends to decrease in response to higher emigration.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 95 (2011)
Issue (Month): 1 (May)
Pages: 88-94

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Handle: RePEc:eee:deveco:v:95:y:2011:i:1:p:88-94
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

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