TY  - RPRT
        AU  - Egger, Hartmut
AU  - Falkinger, Josef
AU  - Grossmann, Volker
        TI  - Brain Drain, Fiscal Competition, and Public Education Expenditure
        PY  - 2007/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 2747
        UR  - https://www.iza.org/publications/dp2747
        AB  - This paper uses a two-country model with integrated markets for high-skilled labor to analyze the opportunities and incentives for national governments to provide higher education. Countries can differ in productivity, and education is financed through a wage tax, so that brain drain affects the tax base and has agglomeration effects. We study unilateral possibilities for triggering or avoiding brain drain and compare education policies and migration patterns in non-cooperative political equilibria with the consequences of bilateral cooperation between countries. We thereby demonstrate that bilateral coordination tends to increase public education expenditure compared to non-cooperation. At the same time, it aims at preventing migration. This is not necessarily desirable from the point of view of a social planner who takes account of the interests of migrants.
        KW  - locational competition
KW  - educational choice
KW  - public education policy
KW  - brain drain
        ER  -