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Is migration a good substitute for education subsidies ?

Frédéric Docquier (), Ousmane Faye and Pierre Pestieau ()

No 4614, Policy Research Working Paper Series from The World Bank

Abstract: Assuming a given educational policy, the recent brain drain literature reveals that skilled migration can boost the average level of schooling in developing countries. This paper introduces educational subsidies determined by governments concerned by the number of skilled workers remaining in the country. The theoretical analysis shows that developing countries can benefit from skilled emigration when educational subsidies entail high .fiscal distortions. However when taxes are not too distortionary, it is desirable to impede emigration and subsidize education. The authors investigate the empirical relationship between educational subsidies and migration prospects, obtaining a negative relationship for 105 countries. Based on this result, the analysis revisits the country specific effects of skilled migration upon human capital. The findings show that the endogeneity of public subsidies reduces the number of winners and increases the magnitude of the losses.

Keywords: Population Policies; Economic Theory&Research; Access to Finance; International Migration; Emerging Markets (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-edu, nep-hrm, nep-lab and nep-mig
Date: 2008-05-01
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Related works:
Working Paper: Is migration a good substitute for education subsidies? (2009) Downloads
Journal Article: Is migration a good substitute for education subsidies? (2008) Downloads
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