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Does International Mobility of High-Skilled Workers Aggravate Between-Country Inequality ?

Volker Grossmann () and David Stadelmann

No 416, FSES Working Papers from Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland

Abstract: This paper analyzes the interaction of international migration of high-skilled labor and relative wage income between source and destination economies of expatriates. We develop an overlapping-generations model with increasing returns which suggests that international integration of the market for skilled labor aggravates between-country inequality by harming those which are source economies to begin with while benefiting host economies. The result is robust to allowing governments to optimally adjust productivity-enhancing investments which could potentially attenuate brain drain. Optimal public investment tends to decrease in response to higher emigration.

Keywords: Brain drain; Between-country wage differences; Public investment; Total factor productivity (search for similar items in EconPapers)
JEL-codes: F22 O30 H40 (search for similar items in EconPapers)
Date: 2010-04-23
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Journal Article: Does international mobility of high-skilled workers aggravate between-country inequality? (2011) Downloads
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