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Education, unemployment and migration

  • Wolfgang Eggert
  • Tim Krieger
  • Volker Meier

    ()

This paper studies a two-region model in which unemployment, education decisions andinterregional migration are endogenous. The poorer region exhibits both lower wagesand higher unemployment rates, and migrants to the richer region are disproportionallyskilled. The brain drain from the poor to the rich region is accompanied by strongerincentives to acquire skills even for immobile workers. Regional shocks tend to affectboth regions in a symmetric fashion, and skilled-biased technological change reduceswages of the unskilled. Both education and migration decisions are distorted by auniform unemployment compensation, which justifies a corrective subsidization.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-Ifo_Working_Papers/wp-ifo-2005-2010/IfoWorkingPaper-78.pdf
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Paper provided by Ifo Institute - Leibniz Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper Nr. 78.

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Date of creation: 2009
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Handle: RePEc:ces:ifowps:_78
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