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Wage Effects of High-Skilled Migration: International Evidence

Listed author(s):
  • Grossmann, Volker

    ()

    (University of Fribourg)

  • Stadelmann, David

    ()

    (University of Bayreuth)

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
Publication status: published in: World Bank Economic Review, 2013, 27 (2), 297-319
Handle: RePEc:iza:izadps:dp6611
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  1. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A brain gain with a brain drain," Economics Letters, Elsevier, vol. 55(2), pages 227-234, August.
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  6. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
  7. 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).
  8. Grossmann, Volker & Stadelmann, David, 2011. "Does international mobility of high-skilled workers aggravate between-country inequality?," Journal of Development Economics, Elsevier, vol. 95(1), pages 88-94, May.
  9. 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.
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  17. 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.
  18. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
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  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].
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