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Consumers and the Brain Drain: Product Design and the Gains from Emigration

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Author Info
Kuhn, Peter J. () (University of California, Santa Barbara)
McAusland, Carol () (University of Maryland)

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Abstract

We consider the welfare effects of skilled worker emigration in a context where skilled labor plays a role in product design. We show such emigration can benefit the residents left behind, even when consumers’ tastes exhibit a form of home bias. This is because emigration improves the design of goods designed by skilled emigrants but consumed in the sending country. In contrast to existing models of beneficial brain drain, our results do not require agglomeration economies, education-related externalities, remittances, return migration, or an emigration “lottery”. Instead, they are driven purely by differences in market size that induce skilled emigrants to design better products abroad than at home.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3602.

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Length: 17 pages
Date of creation: Jul 2008
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Handle: RePEc:iza:izadps:dp3602

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Related research
Keywords: brain drain international labor migration product quality

Other versions of this item:

Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights

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  11. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December. [Downloadable!] (restricted)
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  13. John Whalley & Xian Xin, 2006. "Home and Regional Biases and Border Effects in Armington Type Models," NBER Working Papers 12439, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Miyagiwa, Kaz, 1991. "Scale Economies in Education and the Brain Drain Problem," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 743-59, August. [Downloadable!] (restricted)
    Other versions:
  15. Jones, Ronald W. & Coelho, Isaias & Easton, Stephen T., 1986. "The theory of international factor flows: The basic model," Journal of International Economics, Elsevier, vol. 20(3-4), pages 313-327, May. [Downloadable!] (restricted)
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  17. Rivera-Batiz, Luis A & Romer, Paul M, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 531-55, May. [Downloadable!] (restricted)
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