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Modelling the Flow of Knowledge and Human Capital: A Framework of Innovative Capital

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  • d'Artis Kancs
  • Pavel Ciaian

Abstract

Recently, the EU Council adopted a new labour migration policy instrument - the EU Blue Cards (BC) - for attracting the highly skilled workers to the EU. The present paper examines the potential impacts, which BC may cause on less developed sending countries (LDC). Our results suggest that the EU BC will reduce human capital in LDC. In addition, BC will also have a negative impact on knowledge capital. These findings suggest that without appropriate policy responses, BC makes developing country growth prospects rather bleak than blue. Therefore, we propose and analyse alternative migration policy instruments for LDC. We find that policies implemented on the demand side of the skilled labour market are the most efficient. In contrast, policies that address the supply side of the skilled labour market are the least efficient, though they might be less costly to implement.

Suggested Citation

  • d'Artis Kancs & Pavel Ciaian, 2011. "Modelling the Flow of Knowledge and Human Capital: A Framework of Innovative Capital," EERI Research Paper Series EERI_RP_2011_21, Economics and Econometrics Research Institute (EERI), Brussels.
    • Handle: RePEc:eei:rpaper:eeri_rp_2011_21
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    3. Kancs, d’Artis & Siliverstovs, Boriss, 2016. "R&D and non-linear productivity growth," Research Policy, Elsevier, vol. 45(3), pages 634-646.
    4. d’Artis Kancs & Boriss Siliverstovs, 2020. "Employment effect of innovation," Empirical Economics, Springer, vol. 59(3), pages 1373-1391, September.
    5. d’Artis Kancs, 2006. "The economic geography of labour migration: Competition, competitiveness and development," EERI Research Paper Series EERI_RP_2006_01, Economics and Econometrics Research Institute (EERI), Brussels.
    6. Francesco Di Comite & D'Artis Kancs & Wouter Torfs, 2015. "Macroeconomic Modelling of R&D and Innovation Policies," JRC Research Reports JRC89558, Joint Research Centre.
    7. Kancs, D’Artis & Kielyte, Julda, 2010. "Education in the East, Emigrating to the West?," European Review, Cambridge University Press, vol. 18(2), pages 133-154, May.

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    Keywords

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    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • 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
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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