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High Skilled Migration and the Exertion of Effort by the Local Population

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  • Epstein, Gil S
  • Kunze, Astrid
  • Ward-Warmedinger, Melanie

Abstract

The design of optimal immigration policy, particularly in the face of the spiraling demand for highly skilled workers, such as IT workers and engineers, is a topical issue in the policy debate as well as the economic literature. In this paper, we present empirical evidence from firm-level data collected in 2000 on the demand in Europe for highly skilled workers in general and abroad and their determinants. Major findings are that the fraction of highly skilled recruited from the international labour market is very small, and it seems that foreign and domestic workers are very similar in terms of formal education, that is subject of specialization, and job characteristics. We suggest an efficiency wage model that can explain why firms recruit foreign workers in small numbers and are willing to pay migrants the same wage as local workers and at the same time are willing to pay for moving costs, for example, that are specific to immigrating workers.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3477.

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Date of creation: Jul 2002
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Handle: RePEc:cpr:ceprdp:3477

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Keywords: firm data; globalization; highly skilled workers; labour demand; migration;

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  1. Dustmann, C, 1993. "Earnings Adjustment of Temporary Migrants," Journal of Population Economics, Springer, vol. 6(2), pages 153-68, May.
  2. Epstein, Gil S. & Hillman, Arye L., 2003. "Unemployed immigrants and voter sentiment in the welfare state," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1641-1655, August.
  3. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
  4. DaVanzo, Julie, 1983. "Repeat Migration in the United States: Who Moves Back and Who Moves On?," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 552-59, November.
  5. Imbens, G. & Lancaster, T., 1991. "Efficient Estimation And Stratified Sampling," Harvard Institute of Economic Research Working Papers 1545, Harvard - Institute of Economic Research.
  6. Harry Coccossis & Peter Nijkamp, 2007. "Regional Science in Perspective," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2007(2), pages 137-140.
  7. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  8. Greenwood, Michael J & McDowell, John M, 1986. "The Factor Market Consequences of U.S. Immigration," Journal of Economic Literature, American Economic Association, vol. 24(4), pages 1738-72, December.
  9. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA).
  10. Bell, Brian D, 1997. "The Performance of Immigrants in the United Kingdom: Evidence from the GHS," Economic Journal, Royal Economic Society, vol. 107(441), pages 333-44, March.
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Cited by:
  1. Bossler, Mario, 2013. "Recruiting abroad: the role of foreign affinity and labour market scarcity," IAB Discussion Paper 201319, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Thomas Bauer & Astrid Kunze, 2003. "The Demand for High-skilled Worker and Immigration Policy," RWI Discussion Papers 0011, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.

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