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Wage Effects of High-skilled Migration: International Evidence

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  • Grossmann, Volker
  • Stadelmann, David

Abstract

This paper argues that international migration of high-skilled workers triggers productivity effects at the macro level such that the wage rate of skilled workers may well rise in host countries and decline in source countries. We exploit a recent data set on international bilateral migration flows and provide evidence which is consistent with this hypothesis. In order to identify the causal effect of migration on wages, we propose different instrumentation strategies which address the endogeneity problem arising from the fact that international wage differences affect migration decisions.

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Bibliographic Info

Paper provided by Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland in its series FSES Working Papers with number 415.

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Length: 28 pages
Date of creation: 26 May 2010
Date of revision:
Handle: RePEc:fri:fribow:fribow00415

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Keywords: High-skilled migration ; Wage effects ; Total factor productivity;

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References

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  1. Grossmann, Volker & Stadelmann, David, 2011. "Does international mobility of high-skilled workers aggravate between-country inequality?," Journal of Development Economics, Elsevier, vol. 95(1), pages 88-94, May.
  2. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human Capital Depletion, Human Capital Formation, and Migration. A Blessing in a "Curse"?," Economics Series 55, Institute for Advanced Studies.
  3. Peter Egger & Doina Maria Radulescu, 2009. "The Influence of Labour Taxes on the Migration of Skilled Workers," The World Economy, Wiley Blackwell, vol. 32(9), pages 1365-1379, 09.
  4. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  5. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  6. Nicola Gennaioli & Rafael Laporta & Florencio López-de-Silanes & Andrei Schleifer, 2011. "Human capital and regional development," Economics Working Papers 1286, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2012.
  7. Jeffrey Grogger & Gordon H. Hanson, 2008. "Income Maximization and the Selection and Sorting of International Migrants," NBER Working Papers 13821, National Bureau of Economic Research, Inc.
  8. Cristina Cattaneo, 2008. "International Migration, the Brain Drain and Poverty:A Cross Country Analysis," KITeS Working Papers 212, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jan 2008.
  9. Bhagwati, Jagdish & Hamada, Koichi, 1974. "The brain drain, international integration of markets for professionals and unemployment : A theoretical analysis," Journal of Development Economics, Elsevier, vol. 1(1), pages 19-42, April.
  10. Michel Beine & Frédéric Docquier & Hillel Rapoport, 2001. "Brain drain and economic growth: theory and evidence," ULB Institutional Repository 2013/10449, ULB -- Universite Libre de Bruxelles.
  11. Michel Beine & Frédéric Docquier & Caglar Özden, 2009. "Diasporas," CESifo Working Paper Series 2607, CESifo Group Munich.
  12. Michel Beine & Fréderic Docquier & Hillel Rapoport, 2008. "Brain Drain and Human Capital Formation in Developing Countries: Winners and Losers," Economic Journal, Royal Economic Society, vol. 118(528), pages 631-652, 04.
  13. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
  14. Grossmann, Volker & Stadelmann, David, 2008. "International Mobility of the Highly Skilled, Endogenous R&D, and Public Infrastructure Investment," IZA Discussion Papers 3366, Institute for the Study of Labor (IZA).
  15. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-42, April.
  16. Richard B. Freeman & Remco Oostendorp, 2000. "Wages Around the World: Pay Across Occupations and Countries," NBER Working Papers 8058, National Bureau of Economic Research, Inc.
  17. Rachel M. Friedberg, 2001. "The Impact Of Mass Migration On The Israeli Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1373-1408, November.
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Citations

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Cited by:
  1. Grossmann, Volker & Schäfer, Andreas & Steger, Thomas M., 2013. "Migration, Capital Formation, and House Prices," FSES Working Papers 441, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
  2. Eva Spring & Volker Grossmann, 2013. "Does Bilateral Trust Affect International Movement of Goods and Labor," CESifo Working Paper Series 4235, CESifo Group Munich.

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