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Title:Consumers and the brain drain: product design and the gains from emigration PDF Logo
Authors:Kuhn, Peter
McAusland, Carol
Issue Date:2008
Series/Report no.:IZA Discussion Papers 3602
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.
Subjects:Brain drain
international labor migration
product quality
JEL:F22
Persistent Identifier of the first edition:urn:nbn:de:101:1-20080723139
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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