This paper explores the role of government policies in a situation where the wage gap between high-skilled and low-skilled workers is widening due to increasing foreign competition in the manufacturing of low-skilled intensive goods. A two-period, two-sector general equilibrium model of a small...

This paper explores the role of government policies in a situation where the wage gap between high-skilled and low-skilled workers is widening due to increasing foreign competition in the manufacturing of low-skilled intensive goods. A two-period, two-sector general equilibrium model of a small...

This paper analyzes the relationship between brain drain, human capital accumulation and individual net incomes in the presence of a redistributional tax policy, credit market constraints, administrative costs of tax collection, and lack of government commitment. We characterize how decreasing...