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International Mobility of the Highly Skilled, Endogenous R&D, and Public Infrastructure Investment

Author

Listed:
  • Grossmann, Volker

    (University of Fribourg)

  • Stadelmann, David

    (University of Bayreuth)

Abstract

This paper theoretically and empirically analyzes the interaction of emigration of highly skilled labor, an economy’s income gap to potential host economies of expatriates, and optimal public infrastructure investment. In a model with endogenous education and R&D investment decisions we show that international integration of the market for skilled labor aggravates between-country income inequality by harming those which are source economies to begin with while benefiting host economies. When brain drain increases in source economies, public infrastructure investment is optimally adjusted downward, whereas host economies increase it. Evidence from 77 countries well supports our theoretical hypotheses.

Suggested Citation

  • Grossmann, Volker & Stadelmann, David, 2008. "International Mobility of the Highly Skilled, Endogenous R&D, and Public Infrastructure Investment," IZA Discussion Papers 3366, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3366
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    References listed on IDEAS

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    Cited by:

    1. Volker Grossmann & David Stadelmann, 2012. "Does High-skilled Migration Affect Publicly Financed Investments?," Review of International Economics, Wiley Blackwell, vol. 20(5), pages 944-959, November.
    2. RosalindS. Hunter & Andrew J. Oswald & Bruce G. Charlton, 2009. "The Elite Brain Drain," Economic Journal, Royal Economic Society, vol. 119(538), pages 231-251, June.
    3. Volker Grossmann & David Stadelmann, 2013. "Wage Effects of High-Skilled Migration: International Evidence," The World Bank Economic Review, World Bank, vol. 27(2), pages 297-319.
    4. Grossmann, Volker & Stadelmann, David, 2011. "Does international mobility of high-skilled workers aggravate between-country inequality?," Journal of Development Economics, Elsevier, vol. 95(1), pages 88-94, May.
    5. Rosalind S Hunter, 2009. "The Elite Brain Drain," Working Papers id:2048, eSocialSciences.
    6. Andrés Solimano & Diego Bernardo Avanzini, 2010. "The International Circulation of Elites: Knowledge, Entrepreneurial and Political," WIDER Working Paper Series wp-2010-113, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    educational choice; brain drain; R&D investment; cross-country evidence; public infrastructure investment;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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