Scalera, Domenico (2009): Skilled migration and education policies: Is there still scope for a Bhagwati tax?
Download (124Kb) | Preview
The Bhagwati brain drain tax proposal dating back to more than thirty years ago has been criticized from different viewpoints. In particular, recent literature has pointed out that this tax would hamper accumulation of human capital by reducing gains from skilled migration. In this paper, it is argued that when taking into account social externalities of human capital, and optimal policies implemented by a government caring only for left behind residents, a brain drain tax tends rather to foster the investment in human capital and increase residents’ income and welfare. The Bhagwati tax could even be universally welfare improving. In fact, if the tax is paid by migrants in addition to the ordinary income taxation, their larger fiscal burden might be outweighed by a higher human capital and gross income. Alternatively, if the transfer is financed by the destination country, its fiscal losses might be outweighed by the advantage of more skilled immigrants.
|Item Type:||MPRA Paper|
|Original Title:||Skilled migration and education policies: Is there still scope for a Bhagwati tax?|
|Keywords:||Skilled migration, education policies, Bhagwati tax|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources; Human Development; Income Distribution; Migration
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
H - Public Economics > H5 - National Government Expenditures and Related Policies > H52 - Government Expenditures and Education
|Depositing User:||Domenico Scalera|
|Date Deposited:||30. Dec 2009 10:20|
|Last Modified:||12. Feb 2013 16:41|
Acemoglu D.T. (1996), “A microfoundation for social increasing returns in human capital accumulation”, Quarterly Journal of Economics, 111, 779-804.
Azariadis C. and Drazen A. (1990), “Threshold externalities in economic development”, Quarterly Journal of Economics, 105, 501-526.
Beine M., Docquier F. and Rapoport H. (2001), “Brain drain and economic growth: theory and evidence”, Journal of Development Economics, 64, 275-289.
Beine M., Docquier F. and Rapoport H. (2007), “Measuring international skilled migration: new estimates controlling for age of entry”, World Bank Economic Review, 21, 249-254.
Beine M., Docquier F. and Rapoport H. (2008), “Brain drain and human capital formation in developing countries: winners and losers”, Economic Journal, 118, 631-652.
Bertoli, S., Bruecker H., Facchini G., Mayda A.M., and Peri G. (2009), The battle for brains, Report for the Fondazione Rodolfo de Benedetti.
Besley T. and Coate S. (1997), “An economic model of representative democracy”, Quarterly Journal of Economics, 112, 85-114.
Bhagwati J.N. (1972), “The United States in the Nixon era: The end of innocence”, Daedalus, 101,(4) How Others See the United States, 25-47.
Bhagwati J.N. and Partington M. (1976), Taxing the brain drain: A proposal, North Holland.
Bhagwati J.N. and Dellafar (1973), “The brain drain and income taxation”, World Development.
Commander S., Kangasniemi M. and Winters L.A. (2003), “The Brain Drain: Curse or Boon?”, IZA Discussion Paper 809.
Demange G., Fenge R. and Uebelmess S. (2008), “Financing Higher Education and Labor Mobility”, CESifo Working Paper 2363.
Docquier F., Faye O. and Pestieau P. (2008), “Is migration a good substitute for education subsidies?”, Journal of Development Economics, 86, 263-276.
Docquier F. and Rapoport H. (2009), “Quantifying the impact of highly-skilled emigration on developing countries”, manuscript, May.
Egger H., Falkinger J. and Grossman V. (2007), “Brain drain, fiscal competition and public education expenditure”, IZA Discussion Paper 2747.
Eicher T. and Osang T. (2002), “Protection for sale: An empirical investigation”, American Economic Review, 92, 1702-1710.
Grossman, G. M. and Helpman E. (1994), “Protection for sale”, American Economic Review, 84, 833-850.
Justman M. and Thisse J.F. (1997), “Implications of the mobility of skilled labor force for local public funding of higher education”, Economics Letters, 55, 409-412.
Klenow P.J. and Rodriguez-Clare A. (2005), “Externalities and growth”, in Aghion P. and Durlauf S. eds., Handbook of economic growth, North Holland, 817-861.
Lucas R.E. (1988), “On the mechanics of economic development”, Journal of Monetary Economics, 22, 3-42.
Lucas R.E.B. (2005), International migration and economic development: Lessons from low-income countries, Edward Elgar.
Mendolicchio C., Paolini D. and Pietra T. (2009), “Income tax, subsidies to education and investments in human capital in a two-sector economy”, MPRA Paper 14772.
Mirrlees J.A. (1982), “Migration and optimal income taxes”, Journal of Public Economics, 18, 319-341.
Mountford A. (1997), “Can a brain drain be good for growth in the source economy?”, Journal of Development Economics, 53, 287-303.
OECD (2008), Education at a Glance 2008. OECD Indicators, OECD, Paris.
Poutvaara P. (2008), “Public and private education in an integrated Europe: Studying to migrate and teaching to stay?”, Scandinavian Jopurnal of Economics, 110(3), 591-608.
Poutvaara P. (2004), “Educating Europe”, CESifo Working Paper 1114.
Stark O., Helmenstein C. and Prskawetz A. (1997), “A brain gain with a brain drain”, Economics Letters, 55, 227-234.
Stark O., Helmenstein C. and Prskawetz A. (1998), “Human capital depletion, human capital formation and migration: a blessing in a ‘curse’?”, Economics Letters, 60, 363-367.
Stark O. and Wang Y. (2002) “Inducing human capital formation: migration as a substitute for subsidies”, Journal of Public Economics, 86, 29-46.
Vidal J.P. (1998), “The effect of emigration on human capital formation”, Journal of Population Economics, 11, 589-600.
Wilson J.D. (2006), “Income taxation and skilled migration: The analytical issues”, manuscript,Department of Economics, Michigan State University, May.
Wilson J.D. (2008), “A voluntary brain-drain tax”, Journal of Public Economics, 92, 2385-2391.
World Bank (2009), EdStats. Public expenditure database, available at website: http://ddpext.worldbank.org/ext/EdStats/ExpReport_I