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Wage Effects of High-Skilled Migration: International Evidence

  • Grossmann, Volker

    ()

    (University of Fribourg)

  • Stadelmann, David

    ()

    (University of Fribourg)

This paper argues that international migration of high-skilled workers triggers productivity effects at the macro level such that the wage rate of skilled workers may rise in host countries and decline in source countries. We exploit a recent data set on international bilateral migration flows and provide evidence which is consistent with this hypothesis. We propose different instrumentation strategies to identify the causal effect of skilled migration on log differences of GDP per capita, total factor productivity, and wages of skilled workers between pairs of source and destination countries. These address the endogeneity problem which potentially arises when international wage differences affect migration decisions.

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File URL: http://ftp.iza.org/dp6611.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6611.

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Length: 30 pages
Date of creation: May 2012
Date of revision:
Publication status: published in: World Bank Economic Review, 2013, 27 (2), 297-319
Handle: RePEc:iza:izadps:dp6611
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  1. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
  2. Grossmann, Volker & Stadelmann, David, 2008. "International Mobility of the Highly Skilled, Endogenous R&D, and Public Infrastructure Investment," IZA Discussion Papers 3366, Institute for the Study of Labor (IZA).
  3. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
  4. Peter Egger & Doina Maria Radulescu, 2009. "The Influence of Labour Taxes on the Migration of Skilled Workers," The World Economy, Wiley Blackwell, vol. 32(9), pages 1365-1379, 09.
  5. Beine, Michel & Docquier, Frederic & Ozden, Caglar, 2009. "Diasporas," Policy Research Working Paper Series 4984, The World Bank.
  6. Richard B. Freeman & Remco Oostendorp, 2000. "Wages Around the World: Pay Across Occupations and Countries," NBER Working Papers 8058, National Bureau of Economic Research, Inc.
  7. Nicola Gennaioli & Rafael Laporta & Florencio López-de-Silanes & Andrei Schleifer, 2011. "Human capital and regional development," Economics Working Papers 1286, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2012.
  8. Rachel M. Friedberg, 2001. "The Impact Of Mass Migration On The Israeli Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1373-1408, November.
  9. Edward L. Glaeser & David C. Mare, 1994. "Cities and Skills," NBER Working Papers 4728, National Bureau of Economic Research, Inc.
  10. Faten Ghosn & Glenn Palmer & Stuart A. Bremer, 2004. "The MID3 Data Set, 1993—2001: Procedures, Coding Rules, and Description," Conflict Management and Peace Science, Peace Science Society (International), vol. 21(2), pages 133-154, April.
  11. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
  12. George J. Borjas, 2003. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1335-1374, November.
  13. Michel Beine & Fréderic Docquier & Hillel Rapoport, 2008. "Brain Drain and Human Capital Formation in Developing Countries: Winners and Losers," Economic Journal, Royal Economic Society, vol. 118(528), pages 631-652, 04.
  14. Cristina Cattaneo, 2008. "International Migration, the Brain Drain and Poverty:A Cross Country Analysis," KITeS Working Papers 212, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jan 2008.
  15. Grossmann, Volker & Stadelmann, David, 2010. "Does International Mobility of High-Skilled Workers Aggravate Between-Country Inequality ?," FSES Working Papers 416, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
  16. Robert E.B. Lucas, 2005. "International Migration and Economic Development," Books, Edward Elgar, number 3826.
  17. Bhagwati, Jagdish & Hamada, Koichi, 1974. "The brain drain, international integration of markets for professionals and unemployment : A theoretical analysis," Journal of Development Economics, Elsevier, vol. 1(1), pages 19-42, April.
  18. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human capital depletion, human capital formation, and migration: a blessing or a "curse"?," Economics Letters, Elsevier, vol. 60(3), pages 363-367, September.
  19. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  20. Silvio Hong Tiing Tai & Tobias Müller, 2014. "Individual Attitudes Towards Migration: A Reexamination Of The Evidence," Anais do XL Encontro Nacional de Economia [Proceedings of the 40th Brazilian Economics Meeting] 100, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  21. Thierry Mayer & Soledad Zignago, 2011. "Notes on CEPII’s distances measures: The GeoDist database," Working Papers 2011-25, CEPII research center.
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