Tax Measures in Response to the Brain Drain

60 Pages Posted: 20 Jul 2017 Last revised: 20 Sep 2021

See all articles by Richard Pomp

Richard Pomp

University of Connecticut - School of Law; Independent

Oliver Oldman

Harvard University - International Tax Program (Deceased)

Date Written: 1979

Abstract

Emigration results in the loss of skilled manpower for many countries. The widespread movement of skilled workers (PTKs) from less developed countries (LDCs) to developed countries (DCs) is particularly concerning. This emigration, referred to as the “brain drain”, creates two major concerns for LDCs: (1) slowing economic development, and (2) exploitation by DCs. As a result, LDCs have a growing resentment toward DCs, which leads to irrational discussion and a lack of solutions. The absence of reliable statistics has also greatly impeded progress.

This article discusses proposals for solutions to the brain drain issue. Part I addresses the problem, and analyzes two theories of the brain drain: the internationalist and nationalist theories. DC economists promote the internationalist theory, whereas the LDCs espouse the nationalist theory. Section II proposes three types of solutions to the brain drain: (1) tax incentives to encourage voluntary contributions by PTKs and their employers to LDCs, (2) a special tax on PTKs levied by either the LDCs or the United Nations, and (3) a United Nations assessment of immigration on the DCs. Section III applauds the efforts of Professor Bhagwati, and urges the consideration of a United Nations assessment on DCs and tax incentives for voluntary contributions to LDCs. The article concludes by explaining that the recent UNCTAD meeting represented an important step toward consensus between the LDCs and DCs, even if the DCs are unlikely to adopt any of the proposals.

Keywords: policy, developed countries, less developed countries, skilled workers, unskilled workers, brain drain, tax incentives, UN, incentives, UNCTAD, economics

JEL Classification: k34, h70

Suggested Citation

Pomp, Richard and Oldman, Oliver, Tax Measures in Response to the Brain Drain (1979). 20 Harv. Int'l L.J. 1 (1979), Available at SSRN: https://ssrn.com/abstract=3003578

Richard Pomp (Contact Author)

University of Connecticut - School of Law ( email )

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HOME PAGE: http://www.law.uconn.edu/faculty/rpomp/

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Oliver Oldman

Harvard University - International Tax Program (Deceased)

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