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Consumers and the brain drain: Product and process design and the gains from emigration

  • Kuhn, Peter
  • McAusland, Carol

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

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

Volume (Year): 78 (2009)
Issue (Month): 2 (July)
Pages: 287-291

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Handle: RePEc:eee:inecon:v:78:y:2009:i:2:p:287-291
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

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  1. 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).
  2. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc.
  3. Bhagwati, Jagdish & Rodriguez, Carlos, 1975. "Welfare-theoretical analyses of the brain drain," Journal of Development Economics, Elsevier, vol. 2(3), pages 195-221, September.
  4. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human capital depletion, human capital formation, and migration: a blessing or a "curse"?," Economics Letters, Elsevier, vol. 60(3), pages 363-367, September.
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  7. Berry, R Albert & Soligo, Ronald, 1969. "Some Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 778-94, Sept./Oct.
  8. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December.
  9. Alexander Haupt & Eckhard Janeba, 2004. "Education, Redistribution, and the Threat of Brain Drain," NBER Working Papers 10618, National Bureau of Economic Research, Inc.
  10. Bhagwati, Jagdish & Hamada, Koichi, 1974. "The brain drain, international integration of markets for professionals and unemployment : A theoretical analysis," Journal of Development Economics, Elsevier, vol. 1(1), pages 19-42, April.
  11. Whalley, John & Xin, Xian, 2009. "Home and regional biases and border effects in Armington type models," Economic Modelling, Elsevier, vol. 26(2), pages 309-319, March.
  12. Miyagiwa, K., 1989. "Scale Economics In Education And The Brain Drain Problem," Discussion Papers in Economics at the University of Washington 89-09, Department of Economics at the University of Washington.
  13. Kar-yiu Wong & Chong K. Yip, 1998. "Education, Economic Growth, and Brain Drain," Working Papers 0078, University of Washington, Department of Economics.
  14. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
  15. Mountford, Andrew, 1997. "Can a brain drain be good for growth in the source economy?," Journal of Development Economics, Elsevier, vol. 53(2), pages 287-303, August.
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