May 2010

IZA DP No. 4936: Bidding for Brains: Intellectual Property Rights and the International Migration of Knowledge Workers

published in: Journal of Development Economics, 2011, 95 (1), 77-87

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.