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The global implications of freer skilled migration

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  • Rod Tyers

    ()
    (School of Economics, College of Business and Economics, Australian National University)

  • Iain Bain
  • Jahnvi Vedi

Abstract

One consequence of the trade and technology driven increases in skill premia in the older industrial regions since the 1980s has been a perceived “skill shortage” in those regions, along with freer migration of skilled and professional workers from developing regions. While skilled migration flows remain too small to have large short-run effects on labour markets, a further opening to skilled migrants by the industrialised North could see substantial changes in labour markets and overall growth performance. The links between demographic change, migration flows and growth performance are here explored using a new demographic sub-model that is integrated with an adaptation of the GTAP-Dynamic global economic model in which regional households are disaggregated by age and gender. Skilled migration flows are assumed to be motivated by real wage differences to an extent that is variably constrained by immigration policies. A uniform relaxation of these constraints has most effect on labour markets in the traditional migrant destinations, Australia, Western Europe and North America, where it restrains the skill premium and substantially enhances GDP growth. The skill premium is raised, however, in regions of origin, and particularly in South Asia, although the extent of this is shown to depend sensitively on the responsiveness of skill acquisition to regional skill premia.

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File URL: http://www.hsph.harvard.edu/pgda/WorkingPapers/2006/PGDA_WP_10.pdf
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Bibliographic Info

Paper provided by Program on the Global Demography of Aging in its series PGDA Working Papers with number 1006.

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Date of creation: Jun 2006
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Handle: RePEc:gdm:wpaper:1006

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Web page: http://www.hsph.harvard.edu/pgda
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Keywords: Demographic change; skilled migration; labour markets; economic growth;

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  1. Ronald Lee, 2003. "The Demographic Transition: Three Centuries of Fundamental Change," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 167-190, Fall.
  2. Swan, Trevor W, 2002. "Economic Growth," The Economic Record, The Economic Society of Australia, vol. 78(243), pages 375-80, December.
  3. Adams, Richard H. Jr., 2003. "International migration, remittances, and the brain drain ; a study of 24 labor exporting countries," Policy Research Working Paper Series 3069, The World Bank.
  4. Hatton, Timothy J. & Williamson, Jeffrey G, 2006. "What Determines Immigrations' Impact? Comparing Two Global Centuries," CEPR Discussion Papers 5885, C.E.P.R. Discussion Papers.
  5. Walmsley, Terri Louise & Winters, L. Alan, 2003. "Relaxing the Restrictions on the Temporary Movements of Natural Persons: A Simulation Analysis," CEPR Discussion Papers 3719, C.E.P.R. Discussion Papers.
  6. Rod Tyers & Qun Shi, 2007. "Demographic Change and Policy Responses: Implications for the Global Economy," The World Economy, Wiley Blackwell, vol. 30(4), pages 537-566, 04.
  7. Commander, Simon & Kangasniemi, Mari & Winters, L. Alan, 2003. "The Brain Drain: Curse or Boon?," IZA Discussion Papers 809, Institute for the Study of Labor (IZA).
  8. Eli Berman & John Bound & Stephen Machin, 1997. "Implications of Skill-Biased Technological Change: International Evidence," NBER Working Papers 6166, National Bureau of Economic Research, Inc.
  9. Suryahadi, A. & Chen, P. & Tyers, R., 1999. "Openness, Technological Change and Labor Demand in Pre-Crisis Indonesia," ANU Working Papers in Economics and Econometrics 1999-377, Australian National University, College of Business and Economics, School of Economics.
  10. Schiff, Maurice, 2005. "Brain gain : claims about its size and impact on welfare and growth are greatly exaggerated," Policy Research Working Paper Series 3708, The World Bank.
  11. Kar, Saibal & Beladi, Hamid, 2004. "Skill formation and international migration: welfare perspective of developing countries," Japan and the World Economy, Elsevier, vol. 16(1), pages 35-54, January.
  12. George J. Borjas, 2003. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1335-1374, November.
  13. Tyers, Rod & Duncan, Ron, 1999. "Trade, Technology and Labor Markets: General Equilibrium Perspectives," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 14, pages 226-264.
  14. Faini, Riccardo, 2003. "Is the Brain Drain an Unmitigated Blessing?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  15. Rod Tyers & Jane Golley, 2006. "China's Growth to 2030: The Roles of Demographic Change and Investment Risk," ANU Working Papers in Economics and Econometrics 2006-461, Australian National University, College of Business and Economics, School of Economics.
  16. Ianchovichina, Elena & Robert McDougall, 2000. "Theoretical Structure of Dynamic GTAP," GTAP Technical Papers 480, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  17. William Carrington & Enrica Detragiache, 1998. "How Big is the Brain Drain?," IMF Working Papers 98/102, International Monetary Fund.
  18. Stephen Tokarick, 2002. "Quantifying the Impact of Trade on Wages: The Role of Nontraded Goods," IMF Working Papers 02/191, International Monetary Fund.
  19. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
  20. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
  21. Liu, Jing & Nico van Leeuwen & Tri Thanh Vo & Rod Tyers & Thomas W. Hertel, 1998. "Disaggregating Labor Payments by Skill Level in GTAP," GTAP Technical Papers 314, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
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Citations

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Cited by:
  1. Rod Tyers & Qun Shi, 2006. "Demographic Change and Policy Responses: Implications for the Global Economy," ANU Working Papers in Economics and Econometrics 2006-469, Australian National University, College of Business and Economics, School of Economics.
  2. Rod Tyers & Jane Golley & Bu Yongxiang & Iain Bain, 2007. "China's Economic Growth and its Real Exchange Rate," DEGIT Conference Papers c012_014, DEGIT, Dynamics, Economic Growth, and International Trade.
  3. Rod Tyers & Jane Golley, 2006. "China's Growth to 2030: The Roles of Demographic Change and Investment Premia," PGDA Working Papers 1206, Program on the Global Demography of Aging.
  4. Jane Golley & Rod Tyers, 2006. "Demographic Change and the Labour Supply Constraint," ANU Working Papers in Economics and Econometrics 2006-467, Australian National University, College of Business and Economics, School of Economics.
  5. Rod Tyers & Jane Golley & Ian Bain, 2007. "Projected Economic Growth in China and India: The Role of Demographic Change," ANU Working Papers in Economics and Econometrics 2006-477, Australian National University, College of Business and Economics, School of Economics.
  6. Jane Golley & Rod Tyers, 2012. "China's Gender Imbalance and its Economic Performance," Economics Discussion / Working Papers 12-10, The University of Western Australia, Department of Economics.
  7. Jane Golley & Rod Tyers, 2012. "Demographic Dividends, Dependencies, and Economic Growth in China and India," Asian Economic Papers, MIT Press, vol. 11(3), pages 1-26, October.
  8. Jane Golley & Rod Tyers, 2011. "Contrasting Giants: Demographic Change and Economic Performance in China and India," Economics Discussion / Working Papers 11-04, The University of Western Australia, Department of Economics.
  9. Jane Golley & Rod Tyers, 2012. "Gender 'Rebalancing' in China: A Global-Level Analysis," CAMA Working Papers 2012-46, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  10. Rod Tyers & Jane Golley, 2006. "China's Growth to 2030: Demographic Change and the Labour Supply Constraint," PGDA Working Papers 1106, Program on the Global Demography of Aging.

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