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

  • Epstein, Gil S.

    ()

    (Bar-Ilan University)

  • Kunze, Astrid

    ()

    (Norwegian School of Economics)

  • Ward-Warmedinger, Melanie E.

    ()

    (European Central Bank)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 540.

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Length: 42 pages
Date of creation: Aug 2002
Date of revision:
Publication status: published in: Scottish Journal of Political Economy, 2009, 56 (3), 332–352
Handle: RePEc:iza:izadps:dp540
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  1. Imbens, Guido W. & Lancaster, Tony, 1996. "Efficient estimation and stratified sampling," Journal of Econometrics, Elsevier, vol. 74(2), pages 289-318, October.
  2. 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 333-44, March.
  3. 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 1738-72, December.
  4. 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).
  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. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  7. 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 552-59, November.
  8. 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.
  9. Harry Coccossis & Peter Nijkamp, 2007. "Regional Science in Perspective," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2007(2), pages 137-140.
  10. Dustmann, C, 1993. "Earnings Adjustment of Temporary Migrants," Journal of Population Economics, Springer, vol. 6(2), pages 153-68, May.
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