brain drain remittances and fertility this paper analyzes the effects of skilled migration and remittances on fertility decisions at origin we develop an overlapping generations model which accounts for endogenous fertility and education parents choose the number of children they want to raise and decide upon how many children obtain higher education only high skilled individuals migrate with a certain probability and remit to their parents we find that an increase in the probability to emigrate leads both high and low skilled parents to send more children to obtain higher education however the effect on the number of children is ambiguous in a further analysis we calibrate the model to match different characteristics of a developing economy when the destination country relaxes the immigration restrictions more high skilled individuals leave the origin country the result is that at origin increased high skilled emigration reduces fertility and fosters human capital accumulation

dynamic behavior of co2 spot prices co2 emission allowances are traded nowadays over the counter otc and on exchanges across the european union eu it thus becomes increasingly important for traders of these emission certificates to have a valid co2 spot price model to value potential derivatives in addition co2 emitting companies require an adequate co2 spot price model in order to better assess their production costs and support emissions related investment decisions however sufficient price history is still lacking for the european union emission trading scheme eu ets we therefore present a tractable stochastic equilibrium model reflecting stylized features of the eu ets and analyze the resulting co2 spot price dynamics our main findings are that co2 prices do not have to follow any seasonal patterns discounted prices should possess the martingale property and an adequate co2 price process should exhibit a time and price dependent volatility structure a brief empirical examination regarding market efficiency complements our analysis

international scientist mobility and the locus of knowledge and technology transfer abstract despite the growing interest of scholars and policymakers to better understand the determinants for researchers in public science to transfer knowledge and technology to firms little is known how temporary international mobility of scientists affects both their propensity to engage in knowledge and technology transfer ktt as well as the locus of such transfer based on a sample of more than 950 german academics from science and engineering faculties we investigate how the duration and the frequency of scientists visits at research institutions outside their home country affect ktt activities we find that most mobile scientists engage in ktt to firms both in the host and in their home country suggesting that ktt activities to firms abroad do not substitute or crowd out but complement ktt to firms in the home country we further find that the longer research visits abroad are the higher the likelihood that scientists engage in ktt to firms again both in the host and the home country however the more frequently scientists visit institutions abroad the more likely they are to engage in ktt to firms only in their home country our results therefore provide evidence for the benefits of brain circulation the article contributes to the growing strand of the literature on scientist mobility and on the determinants of industry science linkages at the individual level

rethinking the brain drain abstract when productivity is fostered by both the individual s human capital and by the average level of human capital in the economy individuals underinvest in human capital a strictly positive probability of migration to a richer country by raising both the level of human capital formed by optimizing individuals in the home country and the average level of human capital of nonmigrants in the country can enhance welfare and nudge the economy toward the social optimum under a well controlled restrictive migration policy the welfare of all workers is higher than in the absence of this policy

bankable permits for the control of environmental pollution abstract intertemporal trading of emission permits banking is often identified as one of three promising market mechanisms for controlling pollution along with averaging and trading surprisingly the efficiency properties of permit banking systems have not been investigated using a simple optimal control model this paper investigates firms incentives for banking or borrowing emission permits and compares the emission and output streams firms would choose with the socially optimal solution we find that in many cases firms will suboptimally choose excessive damage and output levels in early periods and correspondingly too few in later periods if given the opportunity to freely move emissions between time periods we propose a simple alternative trading scheme we term modified banking that counters this problem and should be no more difficult for an environmental authority to implement than a straigth banking system

irreversible investment with regime shifts under the real options approach to investment under uncertainty agents formulate optimal policies under the assumption that firms growth prospects do not vary over time this paper proposes and solves a model of investment decisions in which the growth rate and volatility of the decision variable shift between different states at random times a value maximizing investment policy is derived such that in each regime the firm s investment policy is optimal and recognizes the possibility of a regime shift under this policy investment is intermittent and increases with marginal q moreover investment typically is very small but in some states the capital stock jumps implications for marginal q and the user cost of capital are also examined

are emissions permits regressive grandfathered emissions permits redistribute income to wealthy households by creating firm rents that ultimately accrue to shareholders consequently they can be highly regressive even if the poor do not have large budget shares for polluting goods using an analytical model this paper estimates the burden of emissions permits borne by different income groups under control of power plant emissions of carbon so2 and nox we also compare the burden borne by poor households under permits with that under emissions taxes performance standards technology mandates and input taxes and we show how the social costs of policies differ from efficiency costs when society has aversion to inequality

home and away graduate experience from a regional perspective the recent establishment of regional assemblies adds a further policy dimension to higher education this paper consists of an empirical analysis of the choices made by the 1991 northern ireland cohort of entrants to higher education to stay in or leave northern ireland for universities and subsequently then for employment the data indicate that the probability to leave was firmly linked to a level scores though this interacted with religion and social class the choice of labour market for most students reflected the location of university those who returned to northern ireland after graduation were less able and earned less on average than those who remained employment in the locality of the university improves earnings possibly due to the information this generates for both parties

intertemporal emission permits trading under uncertainty and irreversibility this paper analyzes the effect of emission permit banking on clean technology investment and abatement under conditions where the stringency of the future cap is uncertain we examine the problem of heterogeneous firms minimizing the cost of intertemporal emission control in the presence of stochastic future pollution standards and emission permits that are tradable across firms and through time a firm can invest in clean capital an improved pollution abatement technology to reduce its abatement cost we consider two possibilities that investment is reversible or irreversible uncertainty is captured within a two period model only the current period cap is known we show that if banking is positive and marginal abatement costs are sufficiently convex there will be more abatement and investment in clean technology under uncertainty than there would be under certainty and no banking these results are at odds with the common belief that uncertainty on future environmental policy is a barrier to investment in clean capital moreover under uncertainty and irreversibility we find that there are cases where banking enables firms to invest more in clean capital

a brain gain with a brain drain abstract we study human capital depletion and formation in an economy open to out migration as opposed to an economy which is closed under the assumption of asymmetric information the enlarged opportunities and the associated different structure of incentives can give rise to a brain gain in conjunction with a brain drain migration by high skill members of its workforce notwithstanding the home country can end up with a higher average level of human capital per worker

income taxation and international mobility today millions of people work in countries where they are not citizens income taxation and international mobility addresses the novel theoretical and practical problems that this growing phenomenon of international personal mobility creates for the design of a country s tax system and takes up questions that have grown largely out of the extensive debate over jagdish bhagwati s proposal in the early 1970s to tax the brain drain the contributors who include many of the leading theorists of international economics and public finance look at how the difficult question of how horizontal equity is to be defined between nationals at home and abroad or between nationals abroad and foreign citizens abroad and tackle such questions as should a country exercise income tax jurisdiction over its citizens abroad if so in what way is it practical to do so the issues that these questions raise are complex lying on the interface of politics sociology and economics income taxation and international mobility breaks significant new ground by analyzing these questions and building on the modern theory of optimal income taxation to examine the consequences of the possibility of outmigration on the appropriate exercise and design of income tax jurisdiction on those who live outside their native country theoretical analyses are presented in six chapters by the editors and by james mirrlees william baumol and koichi hamada the well known tax law expert richard pomp examines the philippines experience in taxing citizens abroad the editors provide a substantial introduction that synthesizes the book s major analytical approaches and conclusions and richard musgrave provides an insightful view of the issues in his foreword

public versus private investment in human capital endogenous growth and income inequality in this paper we present an overlapping generations model with heterogeneous agents in which human capital investment through formal schooling is the engine of growth we use simple functional forms for preferences technologies and income distribution to highlight the distinction between economies with public education and those with private education we find that income inequality declines more quickly under public education on the other hand private education yields greater per capita incomes unless the initial income inequality is sufficiently high we also find that societies will choose public education if a majority of agents have incomes below average

consumers and the brain drain product and process design and the gains from emigration abstract we consider the welfare effects of skilled worker emigration in a context where skilled labor plays a role in product or process 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 or production processes abroad than at home

emigration wage differentials and brain drain the case of suriname in this article we examine two hypotheses concerning emigration the first hypothesis is that emigration is positively correlated with wage differentials the second hypothesis concerns a positive correlation between emigration and higher education in the sending country the so called brain gain hypothesis we analyse unique time series data for suriname for the period 1972 2009 for which we fit error correction models to disentangle short run from long run effects we document moderate support for the first hypothesis but we find strong support for the brain drain and not brain gain hypothesis we conclude with implications of our findings for suriname

search theoretic models of the labor market a survey we survey the literature on search theoretic models of the labor market we show how this approach addresses many issues including the following why do workers sometimes choose to remain unemployed what determines the lengths of employment and unemployment spells how can there simultaneously exist unemployed workers and unfilled vacancies what determines aggregate unemployment and vacancies how can homogeneous workers earn different wages what are the tradeoffs firms face from different wages how do wages and turnover interact what determines efficient turnover we discuss various modeling choices concerning wage determination and the meeting process including recent models of directed search

no man left behind effects of emigration prospects on educational and labour outcomes of non migrants the development impacts of emigration are largely determined by the education of those who stay behind departure of workers leads to a direct loss of human capital but opportunities for emigration also raise expected returns to education i examine these effects by considering the introduction of education as a selection criterion to recruit nepalese men in the british army this change raised educational investments by 1 15 years and increased the average education of men living in nepal even after allowing for emigration despite not being selected in the british army or emigrating elsewhere these non migrants benefited directly from additional schooling

estimating the general equilibrium benefits of large changes in spatially delineated public goods the purpose of this article is to report a new approach for measuring the general equilibrium willingness to pay for large changes in spatially delineated public goods such as air quality we estimate the parameters of a locational equilibrium model and compute equilibria for alternative scenarios characterizing the availability of public goods within a system of communities welfare measures take into consideration the adjustments of households in equilibrium to nonmarginal changes in public goods the framework is used to analyze willingness to pay for reductions in ozone concentrations in southern california between 1990 and 1995

human capital depletion human capital formation and migration a blessing or a curse abstract we specify conditions under which a strictly positive probability of employment in a foreign country raises the level of human capital formed by optimizing workers in the home country while some workers migrate taking along more human capital than if they had migrated without factoring in the possibility of migration a form of brain drain other workers stay at home with more human capital than they would have formed in the absence of the possibility of migration a form of brain gain

democratizing access to higher education in russia the consequences of the unified state exam reform this is the first paper that evaluates the effects of a reform requiring russian universities to make admission decisions based on the results of a national high school exam we show the reform led to a threefold increase in geographic mobility rates among high school graduates from small cities and towns to start college this is robust to different techniques samples and specifications the reform was also accompanied by increases in students expectations to attend university parental transfers and educational expenditures there is no evidence the reform affected parental labor supply divorce and employment outcomes of graduates who did not move

fundamental irreversibilities in stock externalities abstract this paper concerns the irreversibility effect in stock externalities in an environment of uncertainty with learning taking place one may wish to under emit today to avoid potential environmental irreversibilities alternatively one may wish to under invest in pollution control capital avoiding investments in sunk capital that turn out to be wasted the paper develops theoretical results on the tension between these two effects and separates risk aversion from the irreversibility effect the paper also presents a simple example in climate change policy

who wins from emissions trading evidence from california researchers and environmental policy advocates have raised questions regarding the distributional impacts of emissions trading programs a k a cap and trade while previous research has been careful to identify the causal effect of emissions trading on emissions reductions fowlie et al in am econ rev 102 2 965 993 2012 hereafter fhm we argue that existing estimates of differential impacts on demographic groups have relied on unrealistic assumptions regarding pollution dispersion in this paper we estimate the emissions reduction due to the reclaim cap and trade program in southern california following the identification strategy of fhm but we relax the assumption of uniform dispersion surrounding point sources we model the transport of effluents using a state of the science dispersion model to determine the areas impacted by emissions from each source importantly conditional on race and ethnicity we find that higher income areas receive larger reductions in pollution under cap and trade furthermore conditional on income or poverty rates we find that blacks benefit while hispanics lose relative to whites under reclaim

brain drain and human capital formation in developing countries winners and losers using new data on emigration rates by education level we examine the impact of brain drain migration on human capital formation in developing countries we find evidence of a positive effect of skilled migration prospects on gross human capital formation in a cross section of 127 countries for each country of the sample we then estimate the net effect of the brain drain using counterfactual simulations countries combining relatively low levels of human capital and low emigration rates are shown to experience a beneficial brain drain and conversely there are more losers than winners and the former tend to lose relatively more than what the latter gain

does hazardous waste matter evidence from the housing market and the superfund program this paper uses the housing market to develop estimates of the local welfare impacts of superfund sponsored cleanups of hazardous waste sites we show that if consumers value the cleanups then the hedonic model predicts that they will lead to increases in local housing prices and new home construction as well as the migration of individuals that place a high value on environmental quality to the areas near the improved sites we compare housing market outcomes in the areas surrounding the first 400 hazardous waste sites chosen for superfund cleanups to the areas surrounding the 290 sites that narrowly missed qualifying for these cleanups we find that superfund cleanups are associated with economically small and statistically insignificant changes in residential property values property rental rates housing supply total population and types of individuals living near the sites these findings are robust to a series of specification checks including the application of a regression discontinuity design based on knowledge of the selection rule overall the preferred estimates suggest that the local benefits of superfund cleanups are small and appear to be substantially lower than the 43 million mean cost of superfund cleanups

migration and development research is moving far beyond remittances research on migration and development has recently changed in two ways first it has grown sharply in volume emerging as a proper subfield second while it once embraced principally rural urban migration and international remittances migration and development research has broadened to consider a range of international development processes these include human capital investment global diaspora networks circular or temporary migration and the transfer of technology and cultural norms for this special issue we present a selection of frontier migration and development research that instantiates these trends

migrants savings the probability of return migration and migrants performance this paper highlights a difference between migrants and the native born namely a positive probability of return migration the analysis demonstrates that this probability results in migrants saving more than comparable native born this differential may explain why even if all workers are perfectly homogeneous in skills migrants often outperform the native born in the receiving economy excerpt

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

wage effects of high skilled migration international evidence the international migration of high skilled workers may trigger productivity effects at the macro level such that the wage rate of skilled workers increases in host countries and decrease in source countries the authors exploit data on international bilateral migration flows and provide evidence consistent with this theoretical hypothesis they propose various instrumentation strategies to identify the causal effect of skilled migration on log differences of gdp per capita total factor productivity and the wages of skilled workers between pairs of source and destination countries these strategies aim to address the endogeneity problem that arises when international wage differences affect migration decisions

incentives for investment in advanced pollution abatement technology in emission permit markets with banking we examine the incentives that firms have to invest in cleaner abatementtechnology when the banking of permits is allowed in emission permittrading schemes we show that under certainty permit banking can distortincentives for investment and lead to a sub optimal amount of investmentspending under imperfect information aggregate abatement costuncertainty and investment irreversibility provide arguments for allowingbanking we generalize the model to consider these showing that somebanking is desirable but that it need not be the case that the privatebanking solution is optimal

brain drain and economic growth theory and evidence we focus on the impact of migration prospects on human capital formation and growth in a small open developing economy we assume that agents are heterogeneous in skills and take their educational decisions in a context of uncertainty regarding future migrations we distinguish two growth effects an ex ante brain effect migration prospects foster investments in education because of higher returns abroad and an ex post drain effect because of actual migration flows the case for a beneficial brain drain bbd emerges when the first effect dominates i e when the average level of human capital is higher in the economy opened to migrations than in the closed economy we derive the theoretical conditions required for such a possibility to be observed using cross section data for 37 developing countries we find that the possibility of a bbd could be more than a theoretical curiosity

irreversible abatement investment under cost uncertainties tradable emission permits and emissions charges abstract a major concern with tradable emission permits is that stochastic permit prices may reduce a firm s incentive to invest in abatement capital or technologies relative to other policies such as a fixed emissions charge however under efficient permit trading the permit price uncertainty is caused by abatement cost uncertainties which affect investment under both permit and charge policies we develop a rational expectations general equilibrium model of permit trading and irreversible abatement investment to show how cost uncertainties affect investment under permits we compare the resulting investment incentive with that under charges after controlling for the assumption that random shocks affect the abatement cost linearly we find that firms investment incentive decreases in cost uncertainties but more so under emissions charges than under permits therefore tradable permits in fact may help maintain firms investment incentive under uncertainty

losses and gains to developing countries from the migration of educated workers this paper synthesizes and extends recent research on the new economics of the brain drain in a unified framework the paper shows that while recently identified adverse repercussions of the brain drain exacerbate the long recognized negative impact of the brain drain longer term consequences turn the brain drain into the harbinger of powerful gains these gains have been studied already in recent research or merit attention in future research

taxation and the tiebout model the differential effects of head taxes taxes on land rents and property taxes on the theory of state and local public finance is the seminal paper by charles tiebout 1956 tiebout constructed a multijurisdictional model in which independent local governments offer a wide variety of expenditure and tax policies and perfectly mobile consumers reveal their preferences for local public goods through their choice of residential community he argued that under such circumstances local public service provision would be efficient the tiebout model has formed the basis of a vast number of subsequent articles in the state and local public finance literature and has also been very influential in urban and regional economics the efficiency properties of various tiebout type models of local public good provision have been examined and the role of politics in these models has been debated at length in this literature of more direct relevance to this paper however is the fact that although tiebout had little to say directly about taxation simply assuming the existence of head taxes subsequent analyses have used adaptations of this model to examine the effects of local head taxes land taxes and property taxes it is the literature on the efficiency and distributional effects of alternative local taxes that is the subject of this survey 1

brain drain informality and inequality a search and matching model for sub saharan africa abstract this paper revisits the effect of brain drain on development and inequality using a two sector model with formal and informal labor markets contrary to existing studies we use a search and matching setting that allows to endogenize the employment structure and the wage differentials between different skill groups in the same sector and between workers with identical skills employed in different sectors theoretically the brain drain induces ambiguous welfare effects for those left behind as the potential loss gain depends on the parameters of the model we thus parameterize our model on 33 sub saharan african countries and produce comparative results for each of them we find that skilled emigration induces heterogeneous welfare losses for the low skilled population the size of these losses varies between 0 2 and 8 and is influenced by the parameters of the production and education technologies the results are fairly robust to identifying assumptions to the inclusion of technological externalities and to the endogenization of training decisions

migration human capital accumulation and economic development we study how the possibility of migration changes the composition of human capital in sending countries and how this affects development in our model growth is driven by productivity growth which occurs via imitation or innovation both activities use the same types of skilled labour as input albeit with different intensities heterogenous agents accumulate skills in response to economic incentives migration distorts these incentives and the accumulation of human capital this slows down or even hinders economic development the effect is stronger the farther away the country is from the technological frontier

bidding for brains intellectual property rights and the international migration of knowledge workers we introduce international mobility of knowledge workers into a model of nash equilibrium ipr policy choice among countries we show that governments have incentives to use iprs in a bidding war for global talent resulting in nash equilibrium iprs that can be too high rather than too low from a global welfare perspective these incentives become stronger as developing countries grow in size and wealth thus allowing them to prevent the poaching of their brains by larger wealthier markets

skill development and regional mobility lessons from the australia pacific technical college abstractdeveloping countries can lose part of their investment in training skilled workers who later emigrate one innovative response is for migrants destination countries to help finance skilled emigrants training ex ante linking skill creation and skill mobility we describe one such project the australia pacific technical college aptc which has financed vocational training in five pacific island developing countries for employment both at home and abroad including employment in australia the aptc has attained its goal of skill creation but not its goal of skill mobility we offer explanations for this result and lessons for future policy innovation

immigrant earnings age at immigration matters a correlation between age at immigration and earnings is observed in canadian census data the evidence supports three underlying sources of the effect first work expe rience in the source country yields virtually no return in the host country second the return to education varies with age at immigration and finally an acculturation effect is observed for immigrants who are visible minorities or whose mother tongue is not english further it is found that educational attainment and relatedly earnings vary systematically across age at immigration with those arriving around age 15 to 18 obtaining fewer years of education

the economics of pollution permit banking in the context of title iv of the 1990 clean air act amendments abstract this paper presents a model of the collective emission permit banking behavior of electricity generating units affected by title iv of the clean air act amendments of 1990 a rigorous treatment of the constraint that pollution permits cannot be borrowed from future allocations is introduced this approach enables an analysis of the impact of future changes in electricity demand regulations and technologies on the present permit price and emissions level the effect of uncertainty on the banking behavior is also explored

testing the brain gain hypothesis micro evidence from cape verde abstract does emigration really drain human capital accumulation in origin countries this paper explores a unique household survey designed and conducted to answer this research question we analyze the case of cape verde a country with allegedly the highest brain drain in africa despite a marked record of income and human capital growth in recent decades we propose the first explicit test of brain drain arguments according to which the prospects of own future migration can positively impact educational attainment our most conservative estimates using individual specific variation in economic conditions at the destination indicate that a 10 pp increase in the probability of own future migration improves the probability of completing intermediate secondary schooling by nearly 4 pp for individuals who do not migrate before age 16 these findings are robust to the choice of instruments and econometric specification counterfactual simulations point to significant human capital gains from lowering migration barriers

the distributional effects of pollution regulations do renters fully pay for cleaner air abstract changes in housing prices play an important role in determining the incidence of environmental regulations if the increase in value due to changes in environmental amenities is fully passed forward in the form of higher rental prices renters may receive no net benefit from the regulations to estimate the pass through of the value of an environmental amenity i exploit the reduction in suspended particulate matter pm 10 due to the 1990 clean air act amendments caaa using instrumental variables at varying levels of spatial aggregation i find that the 1990 caaa led to a significant increase in rents but the estimated percentage effect is about half as large as that of owner occupied housing values little of this difference is driven by income differences between renters and homeowners when stratifying by income and comparing the effect of the 1990 caaa on housing values and rents point estimates suggest that half of the increase in value is passed on to renters in the form of higher rents this suggests that pass through may be incomplete but landowners still capture much of the value of the air quality regulations

intertemporal links in cap and trade schemes in a two period general equilibrium model i study the effects of intertemporal emission permit trading in a cap and trade scheme when firms investments in abatement have long term effects to meet their caps firms optimally choose levels of trading and investment in each period by equalizing the marginal benefit of abatement to the marginal cost of abatement in each period the fact that investments have long term effects introduces new effects investments in period 1 have both an additional benefit the reduction of emissions in period 2 and an additional cost the decrease in abatement opportunities in period 2 this changes the standard condition of equalization of marginal costs across periods for cost effectiveness without intertemporal trading some investments in period 1 are entirely driven by second period abatement needs in that case allowing intertemporal trading may reduce investment in period 1 as some long term investments are substituted by intertemporal permit trading descriptive evidence from the eu emissions trading system ets illustrates this potential effect

is skilled immigration always good for growth in the receiving economy abstract a highly skilled immigration can be growth enhancing if the positive contribution of the imported brains to the host economy s human capital stock outweighs the immigration induced adverse effect on educational incentives for natives or growth depleting if the latter effect dominates

who benefits from environmental regulation evidence from the clean air act amendments abstract using geographically disaggregated data and exploiting an instrumental variable strategy we show that contrary to conventional wisdom the benefits of the 1990 clean air act amendments caaa were progressive the caaa created incentives for local regulators to target the initially dirtiest areas for cleanup creating heterogeneity in the incidence of air quality improvements that favored lower income households based on house price appreciation households in the lowest quintile of the income distribution received annual benefits from the program equal to 0 3 of their income on average during the 1990s over twice as much as those in the highest quintile

can a brain drain be good for growth in the source economy this paper analyzes the interaction between income distribution human capital accumulation and migration it shows that when migration is not a certainty a brain drain may increase average productivity and equality in the source economy even though average productivity is a positive function of past average levels of human capital in an economy it is also shown how the temporary possibility of emigration may permanently increase the average level of productivity of an economy

brain drain and ldcs growth winners and losers we present an empirical evaluation of the growth e ects of the brain drain for the source countries of migrants using recent us data on migration rates by education levels carrington and detragiache 1998 we nd empirical support for the bene cial brain drain hypothesis in a sample of 50 developing countries at the country level we distinguish between winners and losers among source countries while the number of winners is smaller these include nearly 80 of the total population of developing countries jel classi cation f22 j24 o15

a model of intertemporal emission trading banking and borrowing abstract this paper provides a general treatment of emission trading banking and borrowing in an intertemporal continuous time model using optimal control theory the decentralized behavior of firms is shown to lead to the least cost solution attainable under joint cost minimization explicit solutions for the time paths of emissions and permit prices are derived when firms are allowed to both bank and borrow and when firms are only allowed to bank emission permits the policy implications of emission banking and borrowing are discussed

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

brain drain in globalization a general equilibrium analysis from the sending countries perspective according to the economic literature high skilled emigration may either harm or bene t developing economies recent research highlighted several positive and negative channels through which the brain drain operates this paper aims at evaluating the relative magnitudes of various brain drain channels and quantifying their global impact on migrants sending countries for this purpose we develop a 10 region general equilibrium model of the world economy characterized by overlapping generations dynamics our ndings suggest that the short run impact of brain drain on resident human capital is extremely crucial as it affects not only the number of high skilled workers available to domestic production but also the sending economy s capacity to innovate adopt modern technologies this latter effect is particularly important in globalization where capital investments are made in places with high production ef ciencies hence despite positive feedback effects those countries facing prevalent high skilled emigration are the most candid victims to brain drain

wind electricity subsidies a windfall for landowners evidence from a feed in tariff in germany abstract subsidies for renewable energy sources are increasing around the globe and amounted to more than 100 billion euro in 2013 this study aims to answer whether the subsidies only ensure that green electricity plants are profitable or whether other market participant as for example landowners benefit from the subsidy in the form of windfall gains as well to identify the causal effect of the subsidies we investigate the impact of the introduction of a price guarantee in the form of a feed in tariff for wind electricity in germany on land prices we employ two different approaches both approaches exploit quasi experimental variation in wind strength across 260 non urban counties in combination with the introduction of the subsidies based on a difference in differences design we find that land prices increased by roughly 1100 euro in high wind areas after the introduction of the subsidy further using an instrumental variable estimator we document that around 18 of expected wind turbine profits are capitalized into land prices finally we show that wind turbine subsidies account for 4 of overall agricultural income in 2007

global competition for attracting talents and the world economy this paper studies the effect of liberalizing the international mobility of college educated workers on the world economy first we combine data on effective and desired migration to identify the net pool of foreign talents npft of selected high income countries so far the eu15 has poorly benefited from its npft while the us has mobilized a large portion of it second we use a micro founded model to simulate the effects of skill selective liberalization shocks in our benchmark model a worldwide liberalization induces larger long run income gains for the eu15 8 8 percent than for the us 5 9 percent however less attractive eu countries such as austria belgium germany greece luxembourg and the netherlands benefit less than the us in addition liberalizing high skilled migration decreases income per worker by 2 5 percent in developing countries overall it increases efficiency 6 2 percent in the worldwide average level of income per capita and inequality 1 2 percentage points in the theil inequality index much greater effects can be obtained if total factor productivity varies with human capital

globalization brain drain and development this paper reviews four decades of economics research on the brain drain with a focus on recent contributions and on development issues we first assess the magnitude intensity and determinants of the brain drain showing that brain drain or high skill migration is becoming a dominant pattern of international migration and a major aspect of globalization we then use a stylized growth model to analyze the various channels through which a brain drain affects the sending countries and review the evidence on these channels the recent empirical literature shows that high skill emigration need not deplete a country s human capital stock and can generate positive network externalities three case studies are also considered the african medical brain drain the exodus of european scientists to the united states and the role of the indian diaspora in the development of india s information technology sector we conclude with a discussion of the implications of the analysis for education immigration and international taxation policies in a global context

uncertainty and climate change uncertainty is pervasive in analysis of climate change how should economists allow for this and how have they allowed for it this paper reviews both of

the probability of return migration migrants work effort and migrants performance abstract this paper demonstrates that differences in earnings between migrants and the native population may reflect differences in incentives rather than differences in characteristics the analysis indicates that in the presence of a positive probability of return migration migrants work effort is higher than that of comparable native born workers this differential may explain why even if all workers are perfectly homogeneous in skills migrants often outperform the native born workers in the receiving economy

the effect of power plants on local housing values and rents abstract this paper uses restricted census microdata to examine housing values and rents for neighborhoods in the united states where power plants were opened during the 1990s compared to neighborhoods with similar housing and demographic characteristics neighborhoods within 2 miles of plants experienced 3 7 decreases in housing values and rents with some evidence of larger decreases within 1 mile and for large capacity plants in addition there is evidence of taste based sorting with neighborhoods near plants associated with modest but statistically significant decreases in mean household income educational attainment and the proportion owner occupied

brain drain in developing countries an original data set on international migration by educational attainment for 1990 and 2000 is used to analyze the determinants of brain drain from developing countries the analysis starts with a simple decomposition of the brain drain in two multiplicative components the degree of openness of sending countries measured by the average emigration rate and the schooling gap measured by the education level of emigrants compared with natives regression models are used to identify the determinants of these components and explain cross country differences in the migration of skilled workers unsurprisingly the brain drain is strong in small countries that are close to major organization for economic co operation and development oecd regions that share colonial links with oecd countries and that send most of their migrants to countries with quality selective immigration programs interestingly the brain drain increases with political instability and the degree of fractionalization at origin and decreases with natives human capital

a brain gain or a brain drain migration endogenous fertility and human capital formation i introduction it is traditionally argued that openness to international migration within a developing country can cause high skilled workers to emigrate and thereby create a brain drain problem 1 however it has been demonstrated in recent studies that such openness to international migration raises the return on human capital in a developing country which in turn raises the average level of human capital in the source country 2 this article revisits this issue building on the prior studies by examining the impact of migration on economic growth through the role of human capital there are however three features that distinguish this article from the prior works first of all while most of the prior studies on migration have tended to focus solely on static models so as to simplify their analyses we develop a dynamic model of migration within which endogenous growth is generated 3 this dynamic model enables us to study the dynamic behavior of the economy and to separate the short run effects from the long run effects when there are changes in migration policy an endogenous growth model is constructed in this article to allow for the persistent growth of a source country hence we contribute to two strands of the literature international migration and the endogenous growth model we also show that under certain conditions the balanced growth path bgp may exist to the best of our knowledge this is the first article to consider the possibility of the bgp within a migration model second we endogenize the fertility choice within the model it is already widely acknowledged that fertility and education are interdependent decisions for parents indeed becker murphy and tamura 1990 developed a model to examine the way s in which the joint decisions on fertility and education affect economic growth while the linkage between growth and inequality was subsequently explored when differential fertility matters by de la croix and doepke 2003 however the studies on migration have tended to assume a constant population growth rate and have generally not taken into account fertility decisions examples include rodriguez 1975 and mountford 1997 both of which presented dynamic models to study the issues of migration and economic growth in both cases population was taken as an exogenous variable and was assumed to grow at a constant rate in this article we allow parents to make fertility and education decisions and to have an opportunity to migrate to a foreign country internalizing fertility decisions induces a trade off between the quality and the quantity of children when there are changes in migration policy this trade off will then have an effect on economic growth as a result of its direct effect on the accumulation of human capital fertility does matter when considering an economy with heterogeneous agents since it will also affect the structure of the labor force third we include the average costs involved in preparing each migrating child to overcome the various barriers when migrating to foreign countries with different backgrounds languages and cultures a static model with migration costs such as language skills preparation was developed by lien and wang 2005 in which they found that when including such costs the openness to international migration may well create a brain drain since it is quite common for the governments of developing countries to encourage their citizens to migrate to certain foreign countries the inclusion of the costs of migration allows us to study the impact of these policies we develop a migration model within which agents differ from one another based upon their different endowments of human capital considering two alternative scenarios to facilitate our examination of the effects of migration on economic performance in the first scenario we consider the case where the host country cannot differentiate between the abilities of the migrants as a result of asymmetric information between the host country and the migrants

efficiency gains from liberalizing labor mobility in this paper we quantify the effect of a complete liberalization of cross border migration on the world gdp and its distribution across regions we build a general equilibrium model endogenizing bilateral migration and income disparities between and within countries our calibration strategy uses data on effective and potential migration to identify total migration costs and visa costs by education level data on potential migration reveal that the number of people in the world who have a desire to migrate is around 400 million this number is much smaller than that predicted in previous studies and reflects the existence of high incompressible migration costs in our benchmark framework liberalizing migration increases the world gdp by 11 5 12 5 percent in the medium term our robustness analysis reveals that the gains are always limited in the range of 7 0 percent with schooling externalities to 17 9 percent if network effects are accounted for

pollution permits and compliance strategies abstract this paper analyzes the impact of spot and futures markets for tradeable pollution permits on the potential polluters compliance decisions polluters can buy permits invest in pollution abatement or else stop production or source out we show that stand alone spot markets induce excessive investment the introduction of a futures market reduces this incentive to invest but is not the optimal way to control pollution a menu of options on pollution rights possibly coupled with intertemporally bundled sales yields higher welfare because of its focus on long run demand elasticities and rent extraction this paper can be applied to a variety of situations such as demand side management public transportation bypass in telecommunications or forward sales by a private monopolist

two way migration between similar countries we develop a model to explain two way migration of high skilled individuals between countries that are similar in their economic characteristics high skilled migration results from the combination of workers whose abilities are private knowledge and a production technology that gives incentives to firms for hiring workers of similar ability in the presence of migration cost high skilled workers self select into the group of migrants the laissez faire equilibrium features too much migration explained by a negative migration externality we also show that for sufficiently low levels of migration cost the optimal level of migration while smaller than in the laissez faire equilibrium is strictly positive finally we extend our model into different directions to capture stylised facts in the data and show that our baseline results also hold in these more complex modelling environments

international migration and educated unemployment this paper provides a novel explanation of educated unemployment which is a salient feature of the labor markets in a number of developing countries in a simple job search framework we show that educated unemployment is caused by the prospect of international migration that is by the possibility of a brain drain in addition the analysis shows that a developing country may end up with more educated workers despite the brain drain and educated unemployment

amenity benefits and the optimal allocation of land agricultural land often yields sig nificant amenity benefits that may not be re flected in the prevailing allocation of land be tween agricultural and nonagricultural uses this paper introduces a simple supply demand model that incorporates these benefits in the de termination of optimal land allocation three stage least squares and county level data are used to estimate the supply and demand param eters these estimates confirm the plausibility of the conceptual model results from the con tingent valuation literature illustrate the extent of underallocation of land to agriculture due to existing institutional conditions some correc tive measures and their distributional effects are discussed and quantified jel q24

selective immigration policies migrants education and welfare at origin abstract destination countries are increasingly adopting selective immigration policies these can effectively increase migrants average education even if one allows for endogenous schooling decisions and education policies at origin still more selective immigration policies can reduce social welfare at origin

developing science scientific performance and brain drains in the developing world abstract establishing a strong scientific community is important as countries develop and requires both producing and retaining of important scientists we show that developing countries produce a sizeable number of important scientists but that they experience a tremendous brain drain education levels population and per capita gdp are positively related to the number of important scientists born in and staying in a country our analysis indicates that democracy and urbanization are associated with the production of more important scientists although democracy is associated with more out migration

a back door brain drain abstract the long run effect of migration solely by unskilled workers is that skilled workers in the home country acquire additional human capital yet their share in the country s workforce falls consequently the country s average level of human capital is lowered

the brain drain and the world distribution of income abstract skilled emigration or brain drain from developing to developed countries is becoming the dominant pattern of international migration today such migration is likely to affect the world distribution of income both directly through the mobility of people and indirectly as the prospect of migration affects the rate of return to education in both the sending and receiving economies this migration pattern will therefore affect human capital accumulation and fertility decisions in both the sending and receiving economies this paper analyzes these effects in a dynamic two country model of the world economy where agents in both countries make optimal fertility and human capital decisions the implications of the analysis for the world distribution of income are derived in the light of recent empirical findings of the brain drain literature the analysis shows that the current trend towards predominantly skilled emigration from poor to rich countries may in the long run increase inequality in the world distribution of income as relatively poor countries grow large in terms of population in the short run however it is possible for world inequality to fall due to rises in gdp per capita in large developing economies with sufficiently low skilled emigration rates

quality of higher education and the labor market in developing countries evidence from an education reform in senegal summary while many studies examine the effect of primary education quality on labor market outcomes in developing countries little is known about the effects at higher levels we exploit the quasi experiment provided by a large scale education reform launched in senegal in 2000 to investigate how quality improvements at the university level affect employment our difference in difference estimates suggest that young high skilled workers experienced a nine percentage point employment gain relative to older workers they are also more likely to have better jobs in the service industry or government suggesting a reduction in the mismatch between the quality of high skilled labor demanded and supplied

heaven s swing door endogenous skills migration networks and the effectiveness of quality selective immigration policies a growing number of oecd countries are leaning toward the adoption of selective immigration policies which are expected to raise the quality or education level of migrants this view neglects two important dynamic effects the role of migration networks which could reduce the quality of migrants and the responsiveness of education decisions to the prospect of migration we propose a model of self selection into migration with endogenous education choices which predicts that migration networks and the quality of migrants can be positively associated when destination countries adopt sufficiently selective immigration policies empirical evidence presented as background motivation suggests that this is indeed the case

efficient unemployment insurance this paper constructs a tractable general equilibrium model of search with risk aversion an increase in risk aversion reduces wages unemployment and investment unemployment insurance has the opposite effect insured workers seek high wage jobs with high unemployment risk an economy with risk neutral workers achieves maximal output without any unemployment insurance but an economy with risk averse workers requires a positive level of unemployment insurance to maximize output therefore moderate unemployment insurance not only improves risk sharing but also increases output

is migration a good substitute for education subsidies assuming a given educational policy the recent brain drain literature reveals that skilled migration can boost the average level of schooling in developing countries this paper introduces educational subsidies determined by governments concerned by the number of skilled workers remaining in the country the theoretical analysis shows that developing countries can benefit from skilled emigration when educational subsidies entail high fiscal distortions however when taxes are not too distortionary it is desirable to impede emigration and subsidize education the authors investigate the empirical relationship between educational subsidies and migration prospects obtaining a negative relationship for 105 countries based on this result the analysis revisits the country specific effects of skilled migration upon human capital the findings show that the endogeneity of public subsidies reduces the number of winners and increases the magnitude of the losses

revisiting the brain drain literature with insights from a dynamic general equilibrium world model the existing brain drain literature has found various mechanisms through which the high skilled south to north migration affects developing economies however some of the new found effects remain disputable due to limited evidence this study aimed to provide suggestive guidelines for future research by identifying the mechanisms that can generate larger economic impacts at the aggregate the analysis is based on a dynamic general equilibrium world model that is calibrated to published statistics and incorporates empirical estimates on the effects of brain drain it simulates short and long run impacts of increased brain drain on gdp per capita gni per capita and income inequality the results suggest that more studies should be conducted to further examine how the brain drain influences human capital formation and technology spillovers both have significant impacts on domestic production and national income a better understanding of different remitting patterns is also desirable to understand how to reduce inequality and promote recipients investment in productive assets

inducing human capital formation migration as a substitute for subsidies abstract when productivity is fostered by an individual s own human capital as well as by the economy wide average level of human capital individuals under invest in human capital the provision of subsidies for the formation of human capital conditional on the subsidy being self financed by tax revenues can bring the economy to its socially optimal level of human capital yet a strictly positive probability of migration to a richer country by raising both the level of human capital formed by optimizing individuals in the home country and the average level of human capital of non migrants in the country can enhance welfare and nudge the economy toward the social optimum indeed under a well controlled restrictive migration policy the welfare of all workers is higher than in the absence of this policy

global talent local careers circular migration of top indian engineers and professionals despite heightened interests from policy makers in the notion of brain circulation the discussion around the issue has remained largely theoretical drawing upon unique data of the alumni of a leading indian university this study examines how migration dynamics unfold within a highly educated population whose emigration is considered as a classic example of brain drain we adopt an integrative framework bringing together macro level push and pull influences and individual level selectivity we find that disparity in economic development between countries drives migration flows in both directions while host country demand has a stronger impact on out migration than on return migration we also detect significant selection effects at the individual level top students are more likely to emigrate and less likely to return in out migration flowing out of the country appear to be the best and the brightest amongst the highly educated talent pool in return migration negative selection is manifested in multiple aspects including ability post migration human capital investment and income we also find that the influences of macro forces vary amongst individuals higher ability individuals appear to be less affected by demand changes the findings have important policy implications for both source countries and receiving countries

reprint of migration and development research is moving far beyond remittances summary research on migration and development has recently changed in two ways first it has grown sharply in volume emerging as a proper subfield second while it once embraced principally rural urban migration and international remittances migration and development research has broadened to consider a range of international development processes these include human capital investment global diaspora networks circular or temporary migration and the transfer of technology and cultural norms for this special issue we present a selection of frontier migration and development research that instantiates these trends

a discrete choice equilibrium approach to valuing large environmental changes abstract this study develops a discrete choice locational equilibrium model to evaluate the benefits of the air quality improvements that occurred in the los angeles area following the 1990 clean air act amendments caaa the discrete choice equilibrium approach accounts for the fact that air quality improvements brought about by the 1990 caaa will change housing choices and prices the study also provides new evidence for the distributional welfare impacts of the 1990 caaa in the los angeles area findings suggest that the air quality improvements that occurred in the los angeles area between 1990 and 2000 provided substantial general equilibrium benefits to households the analysis reveals noticeable differences between partial and general equilibrium welfare gains demonstrating that ignoring equilibrium effects will likely misrepresent the benefits of large environmental changes in addition we find that the equilibrium welfare impacts of the 1990 caaa in the los angeles area varied significantly across income groups