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Global Competition for Attracting Talents and the World Economy

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  • Frédéric Docquier
  • Joël Machado

Abstract

This paper studies the effect of liberalizing the international mobility of college-educated workers on the world economy. First, we combine data on effective and desired migration to identify the net pool of foreign talents (NPFT) of selected high-income countries. So far, the EU15 has poorly benefited from its NPFT while the US has mobilized a large portion of it. Second, we use a micro-founded model to simulate the effects of skill-selective liberalization shocks. In our benchmark model, a worldwide liberalization induces larger long-run income gains for the EU15 (+8.8 percent) than for the US (+5.9 percent). However, less attractive EU countries such as Austria, Belgium, Germany, Greece, Luxembourg and the Netherlands benefit less than the US. In addition, liberalizing high-skilled migration decreases income per worker by 2.5 percent in developing countries. Overall, it increases efficiency (+6.2 percent in the worldwide average level of income per capita) and inequality (+1.2 percentage points in the Theil inequality index). Much greater effects can be obtained if total factor productivity varies with human capital.
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Suggested Citation

  • Frédéric Docquier & Joël Machado, 2016. "Global Competition for Attracting Talents and the World Economy," The World Economy, Wiley Blackwell, vol. 39(4), pages 530-542, April.
  • Handle: RePEc:bla:worlde:v:39:y:2016:i:4:p:530-542
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    File URL: http://hdl.handle.net/10.1111/twec.12267
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    Citations

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    Cited by:

    1. Michal burzynski & Christoph Deuster & Frédéric Docquier, 2018. "The Geography of Talent: Development Implications and Long-Run Prospects," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2018002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    2. repec:spr:scient:v:117:y:2018:i:2:d:10.1007_s11192-018-2888-2 is not listed on IDEAS
    3. Frédéric DOCQUIER & Joël MACHADO, 2015. "Remittance and Migration Prospects for the Twenty-First Century," Working Papers P133, FERDI.
    4. repec:bla:asiaps:v:5:y:2018:i:3:p:599-614 is not listed on IDEAS
    5. repec:spr:italej:v:3:y:2017:i:2:d:10.1007_s40797-017-0054-2 is not listed on IDEAS
    6. Michele Tuccio, 2017. "Determinants of Intra-ASEAN Migration," Asian Development Review, MIT Press, vol. 34(1), pages 144-166, March.
    7. Burzynski, Michal & Deuster, Christoph & Docquier, Frédéric, 2018. "Geography of Skills and Global Inequality," IZA Discussion Papers 11804, Institute for the Study of Labor (IZA).

    More about this item

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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