Inducing human capital formation: migration as a substitute for subsidies
When productivity is fostered by an individual's own human capital as well as by the economy-wide average level of human capital, individuals under-invest in human capital. The provision of subsidies for the formation of human capital, conditional on the subsidy being self-financed by tax revenues, can bring the economy to its socially optimal level of human capital. Yet a strictly positive probability of migration to a richer country, by raising both the level of human capital formed by optimizing individuals in the home country and the average level of human capital of non-migrants in the country, can enhance welfare and nudge the economy toward the social optimum. Indeed, under a well-controlled, restrictive migration policy the welfare of all workers is higher than in the absence of this policy.
(This abstract was borrowed from another version of this item.)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997.
"A brain gain with a brain drain,"
Elsevier, vol. 55(2), pages 227-234, August.
- Nancy H. Chau & Oded Stark, 1998.
"Human Capital Formation, Asymmetric Information, and the Dynamics of International Migration,"
Departmental Working Papers
_095, Chinese University of Hong Kong, Department of Economics.
- Stark, Oded & Chau, Nancy H., 1998. "Human Capital Formation, Asymmetric Information, and the Dynamics of International Migration," Economics Series 52, Institute for Advanced Studies.
- Stark, Oded, 1995. " Return and Dynamics: The Path of Labor Migration When Workers Differ in Their Skills and Information Is Asymmetric," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(1), pages 55-71, March.
When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:86:y:2002:i:1:p:29-46. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.