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High Skilled Migration and the Exertion of Effort by the Local Population

Author

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  • Epstein, Gil S.

    () (Bar-Ilan University)

  • Kunze, Astrid

    () (Norwegian School of Economics)

  • Ward-Warmedinger, Melanie E.

    () (European Central Bank)

Abstract

The design of optimal immigration policy, particularly in the face of the spiralling demand for highly skilled workers, such as IT workers and engineers, is a topical issue in the policy debate as well as the economic literature. In this paper, we present empirical evidence from firm level data collected in 2000 on the demand in Europe for highly skilled workers in general and abroad and their determinants. Major findings are that the fraction of highly skilled recruited from the international labour market is very small, and it seems that foreign and domestic workers are very similar in terms of formal education, that is subject of specialisation, and job characteristics. We suggest an efficiency wage model that can explain why firms recruit foreign workers in small numbers and are willing to pay migrants the same wage as local workers and at the same time are willing to pay for moving costs, for example, that are specific to immigrating workers.

Suggested Citation

  • Epstein, Gil S. & Kunze, Astrid & Ward-Warmedinger, Melanie E., 2002. "High Skilled Migration and the Exertion of Effort by the Local Population," IZA Discussion Papers 540, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp540
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    References listed on IDEAS

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    1. George J. Borjas, 1995. "The Economic Benefits from Immigration," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 3-22, Spring.
    2. Epstein, Gil S. & Hillman, Arye L., 2003. "Unemployed immigrants and voter sentiment in the welfare state," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1641-1655, August.
    3. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA).
    4. Rachel Griffith, 1999. "Using the ARD establishment level data to look at foreign ownership and productivity in the UK," IFS Working Papers W99/06, Institute for Fiscal Studies.
    5. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    6. Griffith, Rachel, 1999. "Using the ARD Establishment Level Data to Look at Foreign Ownership and Productivity in the United Kingdom," Economic Journal, Royal Economic Society, vol. 109(456), pages 416-442, June.
    7. Bell, Brian D, 1997. "The Performance of Immigrants in the United Kingdom: Evidence from the GHS," Economic Journal, Royal Economic Society, vol. 107(441), pages 333-344, March.
    8. Imbens, Guido W. & Lancaster, Tony, 1996. "Efficient estimation and stratified sampling," Journal of Econometrics, Elsevier, vol. 74(2), pages 289-318, October.
    9. Greenwood, Michael J & McDowell, John M, 1986. "The Factor Market Consequences of U.S. Immigration," Journal of Economic Literature, American Economic Association, vol. 24(4), pages 1738-1772, December.
    10. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-553, September.
    11. Dustmann, C, 1993. "Earnings Adjustment of Temporary Migrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 6(2), pages 153-168, May.
    12. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
    13. Harry Coccossis & Peter Nijkamp, 2007. "Regional Science in Perspective," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2007(2), pages 137-140.
    14. Ortega, Javier, 2000. "Pareto-Improving Immigration in an Economy with Equilibrium Unemployment," Economic Journal, Royal Economic Society, vol. 110(460), pages 92-112, January.
    15. DaVanzo, Julie, 1983. "Repeat Migration in the United States: Who Moves Back and Who Moves On?," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 552-559, November.
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    Cited by:

    1. repec:zbw:rwidps:0011 is not listed on IDEAS
    2. Gil S. Epstein, 2013. "Frontier issues of the political economy of migration," Chapters,in: International Handbook on the Economics of Migration, chapter 22, pages 411-431 Edward Elgar Publishing.
    3. Thomas K. Bauer & Astrid Kunze, 2004. "The demand for high-skilled workers and immigration policy," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 47(1), pages 77-88.
    4. Thomas Bauer & Astrid Kunze, 2003. "The Demand for High-skilled Worker and Immigration Policy," RWI Discussion Papers 0011, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    5. Bossler, Mario, 2013. "Recruiting abroad: the role of foreign affinity and labour market scarcity," IAB Discussion Paper 201319, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    More about this item

    Keywords

    globalization; migration; highly skilled workers; firm data; labour demand;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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