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Highly Skilled International Migration, STEM Workers, and Innovation

Author

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  • Bongers Anelí
  • Torres José L.

    (Department of Economics and Economic History, University of Malága, Malága, Spain)

  • Díaz-Roldán Carmen

    (Department of Economics, Universidad de Castilla-La Mancha, 13001 Ciudad Real, Spain)

Abstract

This article studies the implications of highly skilled labor international migration in a two-country dynamic stochastic general equilibrium model. The model considers three types of workers: Science, Technology, Engineering, or Mathematics (STEM) workers, non-STEM college educated workers, and non-college educated workers. Aggregate productivity in each economy is a function of innovations, which can be produced only by STEM workers. The model predicts (i) the existence of a wage premium of STEM workers relative to non-STEM college educated workers, (ii) the skill wage premium is higher in the destination country and increases with positive technological shocks, (iii) a reduction in migration costs increases output, wages, and total labor in the destination country, with opposite effects in the country of origin, and (iv) high skilled immigrants reduce skilled native labor and do not affect unskilled labor. Finally, a migration policy designed to attract STEM workers generates similar effects to a positive aggregate productivity shock.

Suggested Citation

  • Bongers Anelí & Torres José L. & Díaz-Roldán Carmen, 2022. "Highly Skilled International Migration, STEM Workers, and Innovation," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 16(1), pages 73-89, January.
  • Handle: RePEc:bpj:econoa:v:16:y:2022:i:1:p:73-89:n:3
    DOI: 10.1515/econ-2022-0022
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    More about this item

    Keywords

    STEM workers; labor migration; innovation; migration policy; dynamic stochastic general equilibrium models;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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