Education Policy, Student Migration, and Brain Gain

Discussion Paper Series, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy, University of Freiburg, No. 2013-05

35 Pages Posted: 18 Jan 2014

See all articles by Alexander Haupt

Alexander Haupt

University of Plymouth - Plymouth Business School; CESifo (Center for Economic Studies and Ifo Institute)

Tim Krieger

University of Freiburg - Department of Economics

Thomas Lange

University of Konstanz - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: January 2013

Abstract

In this paper, we analyse how increasing student migration from a less developed to a developed country alters education policy in the developed country, and how it affects human capital and welfare in the two countries. We argue that a higher permanent migration probability, i.e., a higher probability that international students continue to stay in their host country after graduation, incentivises the host country to improve its education quality. A higher education quality in turn raises the human capital of all students, including returning students. As long as the permanent migration probability is not too large, this positive quality effect increases human capital and welfare in both the less developed country (LDC) and the developed host country. Thus, a brain gain to the LDC occurs. A decline in the taxes on labour income in the two countries can reinforce this brain gain, although the developed country then raises the tuition fees.

Keywords: Brain gain, education, human capital, mobility, return migration

JEL Classification: F22, I28, H52

Suggested Citation

Haupt, Alexander and Krieger, Tim and Lange, Thomas, Education Policy, Student Migration, and Brain Gain (January 2013). Discussion Paper Series, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy, University of Freiburg, No. 2013-05. Available at SSRN: https://ssrn.com/abstract=2380606 or http://dx.doi.org/10.2139/ssrn.2380606

Alexander Haupt

University of Plymouth - Plymouth Business School ( email )

Mast House
Plymouth, Devon PL4 8AA
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Tim Krieger (Contact Author)

University of Freiburg - Department of Economics ( email )

University of Freiburg
Wilhelmstr. 1b
Freiburg, D-79085
Germany

HOME PAGE: http://www.wguth.uni-freiburg.de

Thomas Lange

University of Konstanz - Department of Economics ( email )

Box D133
D-78457 Konstanz
Germany

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
81679 Munich
Germany

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