Suchergebnisse

Though a net brain gain has tended to be seen as a benefit and referred to as a 'beneficial brain drain' in the literature, its welfare impact for source country residents – or non-migrants – is at best ambiguous. Increased educational investment in response to a brain drain is equivalent to a bet where migrants (M) win and where the impact on residents (R) – whose well-being is a concern for the government – is ambiguous or negative. I compare residents' welfare a) for an open vs. a closed economy, b) under the presence or absence of education externality, c) with vs. without government intervention, and d) with government's concern equal for R and M (R = M) or greater for R (R > M). Main findings are: i) residents lose under an open economy in four of the five scenarios considered, with an ambiguous result under an externality and no intervention; ii) optimal education policy has a positive or ambiguous impact on residents' welfare (and a positive impact under a closed economy); and iii) welfare is higher under intervention when R > M than when R = M. It is worth noting that, though the standard developing country policy of subsidizing higher education is optimal under an education externality in the case of a closed economy, this result need not hold under an open economy.

Based on a welfare-maximization model of skilled migration where education generates a positive externality, this paper examines whether the early view regarding brain drain's (BD) negative impact on source countries and the Bhagwati tax (BT) associated with it, is compatible with the recent more optimistic BD-induced brain gain view. I derive BD's impact on education, welfare, optimal education subsidy (s), and a combination of s and BT, when residents' (emigrants') weight in the government's objective function is 1 (1 − β), with β ε [0,1]. I find that: i) education, welfare and s are higher (lower) under an open than under a closed economy for 1 − β larger (smaller) than the ratio of source-country to host-country income; ii) s and BT are 'policy complements,' i.e., they are positively related; and iii) BT increases with β and reaches a maximum at β = 1. Two implications and a proposal are: a) The early literature focused on resident – rather than on migrant – welfare (the β = 1 case), which is precisely where the optimal BT is largest; b) A second policy instrument should be useful, especially if there are constraints on making changes in the other one. Thus, as opening up the economy implies a lower s, raising BT should be beneficial if, say, parents' and teachers' organizations make it politically difficult if not impossible to reduce s; c) A proposal for collecting the tax is presented.

Immigration continues to be on the forefront of the policy debate on both sides of the Atlantic. A number of reforms of permanent and guest-worker (GW) immigration programs are being considered, and the temporary movement of service providers under Mode IV (GATS) is being negotiated at the Doha Round of the WTO. This paper contributes to the debate by examining these programs in a model where the host country government maximizes its objective function with respect to three policy instruments: the share of migrants' deferred income payment, the value of the bond employers must post and forfeit if GWs overstay, and the size of the program. Circular migration and illegal GWs' status regularization are considered. The paper shows that i) the optimal value of the bond is zero, ii) Mode IV is preferable to GW migration; iii) the optimal policy package consists of Mode IV and permanent migration, and iv) incorporating circular migration improves the policy package. Additional policy implications are also provided.

Host countries have implemented permanent and guest-worker (GW) immigration programs in recent decades, while the temporary movement of service providers under Mode IV of the GATS is one of the issues being negotiated at the Doha Round of the WTO. Though decisions on what programs to adopt have acquired increased urgency, the task has been complicated by host countries' concern with migrants' massive overstaying in past GW programs. This paper contributes to the debate by examining these migration regimes in a model in which the host country maximizes an objective function with respect to i) the size of the migration program, and in the case of temporary migration ii) the value of a bond employers must buy and iii) the share of migrants' income whose payment is deferred. The maximization also takes into account the impact of the policy on source country cooperation on illegal immigration, migrants' incentives and their preference for overstaying. The model solves for the policy measures, the overstaying probability, and the level of illegal migration. The paper concludes that the optimal policy is a combination of Mode IV-type and permanent migration.

A number of developed countries have implemented guest-worker programs in recent decades. Its basic feature is the temporary presence of the foreign guest-workers. The problem with such programs is that there is little to prevent these guest-workers from entering the illegal job market and overstay their legal welcome, which is the reason why these programs became unpopular over time. This paper argues that a well-designed guest-worker program could be acceptable to host countries and could be beneficial for all parties concerned. It presents a host country immigration policy that tries to achieve these objectives by raising the likelihood that guest-workers return to their home country when the permissible time period elapses, and that reduces the number of immigrants entering the country illegally. The policy has three components and is based on legal responsibility by the guest-workers, new insurance markets, and cooperation with the sending country or countries.

This paper considers the policy options of the West Bank and Gaza (WBG) with respect to trade and the exports of labor services. It concludes that i) a non-discriminatory trade policy (NDTP) is unambiguously superior to an FTA with Israel; ii) the WBG should pursue a NDTP with all its neighbors, but only under the condition that the trade policy be open, transparent, and enforced by a credible lock-in mechanism; otherwise, a CU with Israel may be preferable; iii) the PA should establish a system of fee-based permits for Palestinian labor working in Israel, and iv) the PA should consider allowing access by Jordanian workers to the WBG labor market.