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Brain Drain, R&D-Cost Differentials and the Innovation Gap

Fabio Mariani ()

Recherches économiques de Louvain, 2008, vol. 74, issue 3, 251-272

Abstract: Abstract This paper aims at explaining why countries with comparable levels of education still experience notable differences in terms of R&D and innovation. High-skilled migration, ultimately linked to differences in R&D costs, might be responsible for the persistence of such a gap. In fact, in a model where human capital accumulation and innovation are strategic complements, we show that allowing labor outflows may strengthen educational incentives in the lagging economy if migration is probabilistic in nature, but at the same time reduces the share of innovative production. Income (growth) might be consequently affected, and a positive migration chance is very unlikely to act as a substitute for educational subsidies. JEL Classification: F22, O3, I2, J24.

Keywords: innovation; education; brain drain (search for similar items in EconPapers)
JEL-codes: F22 O3 I2 J24 (search for similar items in EconPapers)
Date: 2008
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