Blue Cards, Blue Prospects?

Recently, the European Commission has proposed to introduce a new migration policy instrument - Blue Cards - to attract highly skilled workers from abroad by lifting labour market restrictions, offering financial and housing benefits. The excludability character of human capital suggests that what is beneficial for receiving countries might be harmful for sending countries. This article investigates if and why high-skill migration in general and Blue Card scheme in particular might be harmful for sending countries. We find that the proposed Blue Card scheme makes the developing country growth prospects indeed blue. However, compared to other forms of labour migration, the upcoming Blue Card scheme is known well in advance. Analysing alternative policy options we show that, taking advantage of this ex-ante information, targeted and timed policy interventions can minimise the adverse impacts of high-skill emigration. Thus, compared to other migration regimes Blue Cards are worse for sending countries, but they oer better opportunities for them to avoid the adverse impacts.