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Education, redistribution and the threat of brain drain

  • Alexander Haupt

    ()

  • Eckhard Janeba

    ()

This paper analyzes the relationship between brain drain, human capital accumulation and individual net incomes in the presence of a redistributional tax policy, credit market constraints, administrative costs of tax collection, and lack of government commitment. We characterize how decreasing migration costs for skilled workers affect the time-consistent policies of a government that wants to shift resources from skilled to unskilled workers. In our main result we show that a decline in migration costs is Pareto improving when migration costs are high, but have ambiguous effects when these costs are low. Moreover, mobility costs and human capital accumulation are positively correlated.

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File URL: http://hdl.handle.net/10.1007/s10797-007-9054-8
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Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 16 (2009)
Issue (Month): 1 (February)
Pages: 1-24

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Handle: RePEc:kap:itaxpf:v:16:y:2009:i:1:p:1-24
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=102915

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  1. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human Capital Depletion, Human Capital Formation, and Migration. A Blessing in a "Curse"?," Economics Series 55, Institute for Advanced Studies.
  2. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
  3. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A Brain Gain with a Brain Drain," Economics Series 45, Institute for Advanced Studies.
  4. Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, vol. 86(1), pages 29-46, October.
  5. William Carrington & Enrica Detragiache, 1998. "How Big is the Brain Drain?," IMF Working Papers 98/102, International Monetary Fund.
  6. David E. Wildasin, 2000. "Factor Mobility and Fiscal Policy in the EU: Policy Issues and Analytical Approaches," CESifo Working Paper Series 344, CESifo Group Munich.
  7. Robin Boadway & Nicolas Marceau & Maurice Marchand, 1992. "Investment in Education and the Time Inconsistency of Redistributive Tax Policy," Working Papers 860, Queen's University, Department of Economics.
  8. Andersson, Fredrik & Konrad, Kai A., 2001. "Globalization and Human Capital Formation," CEPR Discussion Papers 2657, C.E.P.R. Discussion Papers.
  9. Robin Boadway & Michael Keen, 1993. "Evasion and time consistency in the taxation of capital income," IFS Working Papers W93/20, Institute for Fiscal Studies.
  10. Andersson, Fredrik & Konrad, Kai A, 2003. "Globalization and Risky Human-Capital Investment," International Tax and Public Finance, Springer, vol. 10(3), pages 211-28, May.
  11. Sascha O. Becker & Andrea Ichino & Giovanni Peri, 2004. "How Large Is the "Brain Drain" from Italy?," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 63(1), pages 1-32, April.
  12. Kehoe, Patrick J, 1989. "Policy Cooperation among Benevolent Governments May Be Undesirable," Review of Economic Studies, Wiley Blackwell, vol. 56(2), pages 289-96, April.
  13. Fredrik Andersson & Kai A. Konrad, 2002. "Human Capital Investment and Globalization in Extortionary States," CESifo Working Paper Series 703, CESifo Group Munich.
  14. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
  15. Panu Poutvaara, 2004. "Public Education in an Integrated Europe: Studying for Migration and Teaching for Staying?," Public Economics 0406006, EconWPA.
  16. 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).
  17. Claudio Thum & Silke Uebelmesser, 2001. "Mobility and the Role of Education as a Commitment Device," CESifo Working Paper Series 450, CESifo Group Munich.
  18. Jean-Pierre Vidal, 1998. "The effect of emigration on human capital formation," Journal of Population Economics, Springer, vol. 11(4), pages 589-600.
  19. Perotti, Roberto, 1993. "Political Equilibrium, Income Distribution, and Growth," Review of Economic Studies, Wiley Blackwell, vol. 60(4), pages 755-76, October.
  20. Bearse, P. & Glomm, G. & Janeba, E., 2000. "Why poor countries rely mostly on redistribution in-kind," Journal of Public Economics, Elsevier, vol. 75(3), pages 463-481, March.
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