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A two-country model of high skill migration with public education

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Abstract

This paper proposes a two-country model of migration in a transferable skill sector, where workers'education is provided free of charge by governments. We study firstly the non-cooperative equilibrium where the poor country decides on the education level and the rich country decides on the quota of skilled migrants. Additional migration raises earnings prospects in the source country and attracts more talented people to that profession, what we refer to as the sector-specific brain gain effect. This game presents a single stable equilibrium with positive migration. Compared to the cooperative equilibrium, in the noncooperative equilibrium the poor country systematically under-invests in education. Whether migration is too strong or too weak depends on the size of the brain gain effect. Furthermore, the size of the welfare gain to be reaped by moving from non-cooperative to the cooperative organization of migration also depends on the strength of the sector-specific brain gain.

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  • Naiditch, Claire & Vranceanu, Radu, 2013. "A two-country model of high skill migration with public education," ESSEC Working Papers WP1301, ESSEC Research Center, ESSEC Business School.
  • Handle: RePEc:ebg:essewp:dr-13001
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    1. L’émigration : une source de “croissance des cerveaux” favorisée par la coopération internationale
      by celialouise.colin@gmail.com (Célia Colin) in BS Initiative on 2014-11-27 13:57:29

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    1. Driouchi, Ahmed & Achehboune, Amale, 2015. "North-South Cooperation in Medical Education and Research: The European Union and South Mediterranean Economies," MPRA Paper 67345, University Library of Munich, Germany.

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    More about this item

    Keywords

    High-skill migration; Brain-gain; Public education; Human capital; Government;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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