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The Global Economic Implications of Freer Skilled Migration

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  • Rod Tyers
  • Iain Bain
  • Jahnvi Vedi

Abstract

One consequence of the trade and technology driven increases in skill premia in the older industrial regions since the 1980s has been a perceived “skill shortage” in those regions, along with freer migration of skilled and professional workers from developing regions. While skilled migration flows remain too small to have large short-run effects on labour markets, a further opening to skilled migrants by the industrialised North could see substantial changes in labour markets and overall growth performance. The links between demographic change, migration flows and economic growth are here explored using a new demographic sub-model that is integrated with an adaptation of the GTAP-Dynamic global economic model in which regional households are disaggregated by age and gender. Skilled migration flows are assumed to be motivated by real wage differences to an extent that is variably constrained by immigration policies. A uniform relaxation of these constraints has most effect on labour markets in the traditional migrant destinations, Australia, Western Europe and North America, where it restrains the skill premium and substantially enhances GDP growth. Skill premia are raised, however, in regions of origin, and particularly in South Asia, although the extent of this is shown to depend sensitively on the responsiveness of skill acquisition to regional skill premia.

Suggested Citation

  • Rod Tyers & Iain Bain & Jahnvi Vedi, 2007. "The Global Economic Implications of Freer Skilled Migration," DEGIT Conference Papers c012_028, DEGIT, Dynamics, Economic Growth, and International Trade.
  • Handle: RePEc:deg:conpap:c012_028
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    File URL: http://degit.sam.sdu.dk/papers/degit_12/C012_028.pdf
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    References listed on IDEAS

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    Cited by:

    1. Jane Golley & Rod Tyers & Yixiao Zhou, 2016. "Contractions in Chinese Fertility and Savings: Long-run Domestic and Global Implications," RBA Annual Conference Volume,in: Iris Day & John Simon (ed.), Structural Change in China: Implications for Australia and the World Reserve Bank of Australia.
    2. Rod Tyers & Ying Zhang, 2011. "Appreciating the Renminbi," The World Economy, Wiley Blackwell, vol. 34(2), pages 265-297, February.
    3. Rod Tyers & Ying Zhang, 2014. "Real exchange rate determination and the China puzzle," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 28(2), pages 1-32, November.
    4. Rod Tyers & Jenny Corbett, 2012. "Japan's economic slowdown and its global implications: a review of the economic modelling," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 26(2), pages 1-28, November.
    5. Tyers, Rod & Golley, Jane, 2008. "China’s Real Exchange Rate Puzzle," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 547-574.

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    Keywords

    Demographic change; skilled migration; labour markets and economic growth;

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