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

Claire Naiditch and Radu Vranceanu

No WP1301, ESSEC Working Papers from ESSEC Research Center, ESSEC Business School

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.

Keywords: High-skill migration; Brain-gain; Public education; Human capital; Government (search for similar items in EconPapers)
JEL-codes: F22 H11 I25 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2013-01
New Economics Papers: this item is included in nep-edu, nep-geo, nep-hrm and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: A two-country model of high skill migration with public education (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:essewp:dr-13001

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