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Externalities from International Labor Migration: Efficacy of a Brain Drain Tax in the Euro-Mediterranean Region

  • Mehmet Tosun

    ()

    (Department of Economics, University of Nevada, Reno)

This paper uses a two-region, two-period overlapping generations model with international labor mobility to examine the efficacy of using tax policy to internalize the externalities created by international labor migration. While a brain drain tax has a substantial limiting effect on labor migration and a small negative effect on per worker growth, it is found to be a viable solution to the negative externality problem. It is also found that the brain-drain tax can raise substantial tax revenue for the SMCs which could be used to enhance human capital in the region.

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File URL: http://www.business.unr.edu/econ/wp/papers/UNRECONWP06007.pdf
File Function: First version, 2006
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Paper provided by University of Nevada, Reno, Department of Economics & University of Nevada, Reno , Department of Resource Economics in its series Working Papers with number 06-007.

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Length: 27 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:unr:wpaper:06-007
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  1. Börsch-Supan, Axel & Ludwig, Alexander & Winter, Joachim, 2001. "Aging, pension reform, and capital flows: A multi-country simulation model," Sonderforschungsbereich 504 Publications 01-08, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  2. Ashraf, Quamrul & Galor, Oded & Özak, Ömer, 2009. "Isolation and Development," CEPR Discussion Papers 7531, C.E.P.R. Discussion Papers.
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