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Education, Redistribution, and the Threat of Brain Drain

Alexander Haupt () and Eckhard Janeba ()

No 10618, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper analyzes the relationship between brain drain, human capital accumulation and individual net incomes in the presence of a redistributional tax policy, credit market constraints, administrative costs of tax collection, and lack of government commitment. We characterize how decreasing migration costs for skilled workers affect the time-consistent policies of a government that wants to shift resources from skilled to unskilled workers. In our main result we show that a decline in migration costs is Pareto improving when migration costs are high, but have ambiguous effects when these costs are low. Moreover, mobility costs and human capital accumulation are positively correlated.

JEL-codes: F22 H2 (search for similar items in EconPapers)
Date: 2004-07
Note: ITI LS
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Published as Haupt, Alexander and Eckhard Janeba. "Education, Redistribution and the Threat of Brain Drain." International Tax and Public Finance 16, 1 (February 2009): 1-24.

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