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Brain drain and income distribution

Author

Listed:
  • Aida Galiano

    () (Universidad Internacional de La Rioja (UNIR))

  • José Gabriel Romero

    () (Universidad de Santiago de Chile)

Abstract

Abstract In a context in which increased income inequality has raised much concern, and skilled workers move easily across countries, an important question arises: how does the brain drain affect income distribution in the source economy? We address this question and introduce two contributions to the literature on brain drain. First, we present and solve a simple stylized model to study whether and, if so, how the brain drain affects the distribution of income, in a context in which higher education is publicly financed with general taxes. Second, we explore empirically the effect of an increase in skilled emigration on income distribution. A key prediction of our theoretical model is the existence of a non-monotonic relationship between income inequality and emigration of skilled workers. Our empirical data confirm this result, showing a statistically significant inverse U-shaped form.

Suggested Citation

  • Aida Galiano & José Gabriel Romero, 2018. "Brain drain and income distribution," Journal of Economics, Springer, vol. 124(3), pages 243-267, July.
  • Handle: RePEc:kap:jeczfn:v:124:y:2018:i:3:d:10.1007_s00712-017-0576-y
    DOI: 10.1007/s00712-017-0576-y
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    References listed on IDEAS

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    More about this item

    Keywords

    Tertiary education; Brain drain; Income distribution;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • I2 - Health, Education, and Welfare - - Education
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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