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Brain drain reversal and return subsidy

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  • Dai, Tiantian
  • Liu, Xiangbo
  • Xie, Biancen

Abstract

This paper explores how return subsidies affect an individual’s education, migration and return decisions within an asymmetric information framework. To achieve this, we develop a theoretical model in which agents are heterogeneous in their initial stocks of human capital. Our model can generate three types of migration at the same time: permanent migration, immediate return migration, and return migration with international work experience. We then examine the effects of differential return subsidies in different contexts and find that in the presence of asymmetric information, it is possible for return subsidies to play a negative role in determining a developing country’s aggregate and average human capital stock, and thus its economic growth.

Suggested Citation

  • Dai, Tiantian & Liu, Xiangbo & Xie, Biancen, 2015. "Brain drain reversal and return subsidy," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 443-455.
  • Handle: RePEc:eee:jcecon:v:43:y:2015:i:2:p:443-455
    DOI: 10.1016/j.jce.2014.03.002
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    Cited by:

    1. Abdulloev, Ilhom, 2020. "Changes in the Forsaken Schooling and Migration Relationship in Tajikistan," IZA Discussion Papers 13435, Institute of Labor Economics (IZA).
    2. Fitwi, Abrar M. & Hein, Scott E. & Mercer, Jeffrey M., 2015. "The U.S. housing price bubble: Bernanke versus Taylor," Journal of Economics and Business, Elsevier, vol. 80(C), pages 62-80.
    3. Abdulloev Ilhom & Epstein Gil S. & Gang Ira N., 2020. "A Downside to the Brain Gain Story," Economics, Sciendo, vol. 8(2), pages 9-20, December.
    4. Abdulloev, Ilhom & Epstein, Gil S. & Gang, Ira N., 2019. "Schooling Forsaken: Education and Migration," IZA Discussion Papers 12088, Institute of Labor Economics (IZA).
    5. Gega Todua, 2017. "Financing Education Abroad: A Developing Country Perspective," CERGE-EI Working Papers wp608, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

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    More about this item

    Keywords

    Return migration; Economic growth;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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