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Migration of Skilled Workers: Policy Interaction between Host and Source Countries

  • Slobodan Djajic
  • Michael S. Michael
  • Alexandra Vinogradova

This paper examines the interaction between policies of the host and source countries in the context of a model of skilled-worker migration. The host country aims to provide low-cost labor for its employers while also taking into consideration the fiscal burden of providing social services to migrant workers and their dependants. It optimizes by setting a time limit on the duration of a guest-worker's permit. The source country seeks to maximize its own welfare by optimally choosing the amount of training it offers to its citizens, some of whom may end up working abroad. Within this framework, we solve for the Nash equilibrium values of the policy instruments and compare them with the case where both countries cooperate to maximize joint welfare.

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File URL: http://papers.econ.ucy.ac.cy/RePEc/papers/12-12.pdf
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Paper provided by University of Cyprus Department of Economics in its series University of Cyprus Working Papers in Economics with number 12-2012.

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Length: 36 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:ucy:cypeua:12-2012
Contact details of provider: Web page: http://www.econ.ucy.ac.cy

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  11. 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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  27. Michel Beine & Frédéric Docquier & Hillel Rapoport, 2001. "Brain drain and economic growth: theory and evidence," ULB Institutional Repository 2013/10449, ULB -- Universite Libre de Bruxelles.
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