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International Trade in Education, Skilled Migration and Economic Growth

Lan Hong Thi Dang and Russell Hillberry

No 1055, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: International trade in education is a large and growing phenomenon. We investigate the consequences of such trade for economic growth in developing countries using a model with a role for trade costs and endogenous emigration of students educated abroad. The developing country’s comparative disadvantage in education means that trade allows it to acquire human capital at a lower opportunity cost, and raise its steadystate growth rate. If a sufficiently large share of students remain abroad, however, the net effect of international trade and skilled migration reduces steady-state growth rates below their autarky levels

Date: 2008
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