Money, fame and the allocation of talent: Brain drain and the institution of science

Doh-Shin Jeon and Domenico Menicucci

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: The earning structure in science is known to be flat relative to the one in the private sector, which could cause a brain drain toward the private sector. In this paper, we assume that agents value both money and fame and study the role of the institution of science in the allocation of talent between the science sector and the private sector. Following works on the Sociology of Science, we model the institution of science as a mechanism distributing fame (i.e. peer recognition). We show that since the intrinsic performance is less noisy signal of talent in the science sector than in the private sector, a good institution of science can mitigate the brain drain. We also find that providing extra monetary incentives through the market might undermine the incentives provided by the institution and thereby worsen the brain drain. Finally, we study the optimal balance between monetary and non-monetary incentives in science.

Keywords: Fame; Science; Brain Drain; Incentives; Asymmetric Information (search for similar items in EconPapers)
JEL-codes: D82 H21 H41 J24 (search for similar items in EconPapers)
Date: 2005-02, Revised 2005-08
New Economics Papers: this item is included in nep-pbe and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Money, fame and the allocation of talent: Brain drain and the institution of science (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:805

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