Tax Incentives, Educational Attainment and The Reserve Army of the (Skilled but) Unemployed: The Case of Puerto Rico

By Carlos F. Liard-Muriente.

Published by The Social Sciences Collection

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Article: Print $US10.00
Article: Electronic $US5.00

The literature about tax incentive programs is extensive, but there is still no clear answer regarding the effectiveness of such programs, mainly because of conflicting results among studies. Furthermore, most of the analysis regarding incentives is limited to measuring effectiveness in terms of firms’ location decisions and job creation. Another potential impact of incentives relates to educational attainment of the population of the region offering the incentives. The lure of higher wages from foreign firms might entice individuals to increase their human capital. However, in regions with relatively high unemployment rates, this could create the conditions for brain drain, as skilled workers that are not able to find jobs select migration. We use data from Puerto Rico to demonstrate this phenomenon.

Keywords: Tax Incentives, Foreign Direct Investment, Skills Upgrading, Unemployment, Brain Drain

International Journal of Interdisciplinary Social Sciences, Volume 6, Issue 9, pp.49-58. Article: Print (Spiral Bound). Article: Electronic (PDF File; 2.295MB).

Carlos F. Liard-Muriente

Associate Professor, Economics Department, Robert Vance Academic Center 412, Central Connecticut State University, New Britain, CT, USA

Carlos F. Liard-Muriente was born in San Juan, Puerto Rico. After completing undergraduate studies in Economics and Finance at the University of Puerto Rico-Rio Piedras, he attended the American Economic Association Summer School at the University of Texas-Austin, and later completed his Ph.D. in Economics at the University of Massachusetts-Amherst. Currently, he is the Chair of the Economics Department at Central Connecticut State University, as well as the Associate Director of the Latin American, Latino and Caribbean Center. His teaching and research interests include Development Economics, Globalization, International Economics, Latin American and Caribbean Economics, Latinos/as in the US, and Macroeconomics.

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