A back-door brain drain

In this paper we study the impact of the international migration of unskilled workers on skill formation and the average skill level in the home country. We analyze what appears to be the least threatening scenario from the point of view of its effect on the supply of skills at home: namely, migration exclusively by unskilled workers. Somewhat surprisingly, we find that even without the departure of skilled workers, the home country suffers reduced aggregate skill formation. Although as a response to a higher wage rate per unit of human capital in the new equilibrium skilled workers choose to accumulate more human capital than before the opening up to migration of unskilled workers, the number and share of skilled workers in the home country’s workforce fall. The combined effect is a decrease in the average level of human capital in the home country.


Issue Date:
2012-04
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/122433
Total Pages:
12
JEL Codes:
F22; J24; O15
Series Statement:
ZEF-Discussion Papers on Development Policy
No. 164




 Record created 2017-04-01, last modified 2017-08-26

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