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SKILLED MIGRATION AND EDUCATION POLICIES: IS THERE STILL SCOPE FOR A BHAGWATI TAX? *
Author(s) -
SCALERA DOMENICO
Publication year - 2012
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2011.02256.x
Subject(s) - economics , human capital , scope (computer science) , welfare , externality , investment (military) , labour economics , government (linguistics) , double taxation , public economics , monetary economics , market economy , microeconomics , political science , philosophy , politics , computer science , law , programming language , linguistics
Recent literature has criticized the Bhagwati ‘brain drain tax' because it may hamper accumulation of human capital by reducing gains from skilled migration. In this paper, it is argued that when taking into account social externalities of human capital, and optimal policies implemented by a government caring only for the remaining residents, a brain drain tax tends rather to foster the investment in human capital and increase residents' income and welfare. The Bhagwati tax could even be universally welfare improving if a fiscal burden borne by migrants might be outweighed by a higher human capital and gross income.