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The Prospect of Migration, Sticky Wages, and "Educated Unemployment"

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  • Stark, Oded
  • Fan, C. Simon

Abstract

An increase in the probability of work abroad, where the returns to schooling are higher than at home, induces more individuals in a developing country to acquire education, which leads to an increase in the supply of educated workers in the domestic labor market. Where there is a sticky wage-rate, the demand for labor at home will be constant. With a rising supply and constant demand, the rate of unemployment of educated workers in the domestic labor market will increase. Thus, the prospect of employment abroad causes involuntary “educated unemployment” at home. A government that is concerned about “educated unemployment” and might therefore be expected to encourage unemployed educated people to migrate will nevertheless, under certain conditions, elect to restrict the extent of the migration of educated individuals.

Suggested Citation

  • Stark, Oded & Fan, C. Simon, 2011. "The Prospect of Migration, Sticky Wages, and "Educated Unemployment"," Discussion Papers 98572, University of Bonn, Center for Development Research (ZEF).
    • Handle: RePEc:ags:ubzefd:98572
    DOI: 10.22004/ag.econ.98572
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    References listed on IDEAS

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    Cited by:

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    2. Tasnim Khan & Fatima Yousaf, 2013. "Unemployment Duration of First Time Job Seekers: A Case Study of Bahawalpur," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 1(1), pages 8-19, December.
    3. Girsberger, Esther Mirjam & Meango, Romuald, 2022. "The Puzzle of Educated Unemployment in West Africa," IZA Discussion Papers 15721, IZA Network @ LISER.

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    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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