02075cas a2200241 a 4500 AALejournalIMF003638 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451921335 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Human Capital Flight : Impact of Migrationon Income and Growth. Washington, D.C. : International Monetary Fund, 1994. 1 online resource (40 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper analyses the impact of government tax and subsidy policy on immigration of human capital and the effect of such immigration on growth and incomes. In the context of a two-country endogenous growth model with heterogeneous agents and human capital accumulation, we argue that human capital flight or 'brain drain' arising out of wage differentials, say because of differences in income tax rates or technology, can bring about a reduction in the steady state growth rate of the country of emigration. Additionally, permanent difference in the growth rates as well as incomes between the two countries can occur making convergence unlikely. While in a closed economy, tax-financed increases in subsidy to education can have a positive effect on growth, such a policy can have a negative effect on growth when human capital flight is taking place. Since subsidizing higher education is more likely to induce substantial brain drain, it is likely to be inferior to subsidy to lower levels of education if growth is to be increased. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1994/155 Full text available on IMF http://elibrary.imf.org/view/journals/001/1994/155/001.1994.issue-155-en.xml IMF e-Library