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

  • d'Artis Kancs
  • Pavel Ciaian

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.

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Paper provided by Economics and Econometrics Research Institute (EERI), Brussels in its series EERI Research Paper Series with number EERI_RP_2011_21.

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Date of creation: 12 Dec 2011
Date of revision:
Handle: RePEc:eei:rpaper:eeri_rp_2011_21
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  5. Furman, Jeffrey L. & Porter, Michael E. & Stern, Scott, 2002. "The determinants of national innovative capacity," Research Policy, Elsevier, vol. 31(6), pages 899-933, August.
  6. d'Artis Kancs & Pavel Ciaian, 2010. "The Impact of the EU Blue Card Policy on Economic Growth in the African Sending Countries," EERI Research Paper Series EERI_RP_2010_10, Economics and Econometrics Research Institute (EERI), Brussels.
  7. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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  9. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  10. Ciaian, Pavel & Dries, Liesbeth & Kancs, d'Artis, 2010. "Job creation and job destruction in the EU agriculture," 114th Seminar, April 15-16, 2010, Berlin, Germany 61351, European Association of Agricultural Economists.
  11. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
  12. d'Artis Kancs & Julda Kielyte, 2010. "Education in the East, Emigrating to the West?," EERI Research Paper Series EERI_RP_2010_01, Economics and Econometrics Research Institute (EERI), Brussels.
  13. J. N. Bhagwati & C. Rodriguez, 1975. "Welfare-Theoretical Analysis of the Brain Drain," Working papers 158, Massachusetts Institute of Technology (MIT), Department of Economics.
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  15. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-66, April.
  16. d'Artis Kancs & Pavel Ciaian, 2007. "Blue Cards, Blue Prospects?," LICOS Discussion Papers 19407, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  17. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  18. d’Artis Kancs & Julda Kielyte, 2002. "Migration in the Enlarged European Union: Empirical Evidence for Labour Mobility in the Baltic States," EERI Research Paper Series EERI_RP_2002_04, Economics and Econometrics Research Institute (EERI), Brussels.
  19. Carrington, William J & Detragiache, Enrica & Vishwanath, Tara, 1996. "Migration with Endogenous Moving Costs," American Economic Review, American Economic Association, vol. 86(4), pages 909-30, September.
  20. d'Artis Kancs & Julia Kielyte, 2010. "European Integration and Labour Migration," EERI Research Paper Series EERI_RP_2010_27, Economics and Econometrics Research Institute (EERI), Brussels.
  21. Mansfield, Edwin & Schwartz, Mark & Wagner, Samuel, 1981. "Imitation Costs and Patents: An Empirical Study," Economic Journal, Royal Economic Society, vol. 91(364), pages 907-18, December.
  22. Louka T. Katseli & Robert E.B. Lucas & Theodora Xenogiani, 2006. "Effects of Migration on Sending Countries: What Do We Know?," OECD Development Centre Working Papers 250, OECD Publishing.
  23. Averett, Susan L. & Burton, Mark L., 1996. "College attendance and the college wage premium: Differences by gender," Economics of Education Review, Elsevier, vol. 15(1), pages 37-49, February.
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