Education in the East, Emigrating to the West?

This paper examines the potential impacts of East-West migration of talents on the innovative capital and hence the long-run growth prospects in Eastern sending countries. Complementing previous studies, we examine the impact of high skill migration not only on the formation of human capital, but also consider migration's impact on knowledge capital in the sending countries. In line with previous studies we find that in the short- to medium-term high skill migration strictly reduces national innovative capital and hence increases the gap between East and West. However, these effects might be mitigated by factors such as reinforced education of workers, productive investment of remittances, return migration and increased knowledge transfer. Given that the emigration of highly skilled affects human capital differently than knowledge capital, addressing the adverse impacts of the most talented and highly skilled worker emigration efficiently, differentiated policies are required for human capital and knowledge capital.International labour migration, skilled workers, growth, human capital.

Migration, unemployment, and skill downgrading: Specific-factors approch

This paper analyzes the impact of the skill composition of migration flows on the host country's labor market in a specific factors two-sector model with heterogeneous labor (low-, medium-, and highly-skilled) and price- and wage-setting behavior. The low- and medium-skilled labor markets are characterized by frictions due to wage bargaining. Moreover, we assume skill downgrading of unemployed medium-skilled workers into low-skilled labor supply. Endogenous benefits create an interdependency between the two bargaining processes. Particular attention is paid to medium-skilled migration, which enables us to contribute to the literature by replicating important stylized facts regarding medium skills, such as i) the interaction between immigration, low-skilled unemployment, and mediumskill downgrading, ii) the increase in low skill intensive service jobs. The model is calibrated using data for Germany. The key findings are: (i) a migration-induced supply shock of medium skilled workers decreases the low-skilled unemployment rate under endogenous benefits; (ii) migration of only medium skilled labor has a neutral impact on GDP per capita; (iii) immigration of medium skilled labor together with some high skilled labor has a positive effect on output per capita.Dieses Papier analysiert die Arbeitsmarktauswirkungen der Qualifikationsstruktur der Migrationsströme. Dazu wird ein Zwei-Sektoren Modell mit spezifischen Faktoren, heterogenen Arbeitsmärkten (gering-, mittel- und hochqualifiziert) und Preis- und Lohnfestsetzung verwendet. Die Arbeitsmärkte der gering- und mittelqualifizierten Fachkräfte sind von Friktionen geprägt, welche auf die Tarifverhandlungen zurückzuführen sind. Darüber hinaus wird die Annahme getroffen, dass mittelqualifizierte Arbeitslose in den Arbeitsmarkt der geringqualifizierten herabgestuft werden können. Der Fokus liegt insbesondere auf Migration von mittelqualifizierten Fachkräften, welcher uns ermöglicht die Literatur zu ergänzen und wichtige stilisierten Fakten bezüglich des mittleren Qualifikationsniveaus zu reproduzieren, wie zum Beispiel i) die Interaktion zwischen Migration, geringqualifizierte Arbeitslose und die Herabstufung von mittelqualifizierten Arbeitnehmern, ii) der Zuwachs von niedrigqualifizierten Arbeitsplätze im Dienstleistungssektor. Das Modell, kalibriert mit Hilfe der Datensätze für Deutschland, liefert folgende wichtige Ergebnisse: (i) ein durch Migration herbeigeführter Angebotsschock von mittelqualifizierten Fachkräften verringert die Arbeitslosenquote der niedrigqualifizierten Arbeitskräfte, wenn die Arbeitslosenhilfe endogen bestimmt ist; (ii) die Migration von nur mittelqualifizierten Fachkräften hat eine neutrale Auswirkung auf das BIP pro Kopf; (iii) die Zuwanderung von mittel- und hochqualifizierten Arbeitskräften hat einen positiven Effekt auf das BIP pro Kopf

The future of the fence around the European labour market

In international forums the EU calls for freedom of movement for goods, services and capital. Freedom of movement of labour - labour migration in other words - is excluded from this claim, certainly in relation to medium- and low-skilled labour. This paper addresses two questions. Firstly, what are the effects of EU's restrictive labour migration policy on welfare within and outside the EU? Both welfare effects are found to be considerable. Secondly, is this policy sustainable over the longer term, say towards 2030? The paper evaluates foreseeable pressures on the fence around the EU labour market, coming from within and from outside the EU. The paper sketches policy options for dealing with the dilemmas that may arise from these pressures.labour migration; European Union; welfare; immigration policy

Qualification Structure, Over- and Underqualification of the Foreign Born in Austria and the EU

This project focuses on comparing the qualification structure of migrants residing in Austria as well as their over- and underqualification rates to other EU countries. The skill structure of foreign born residing in Austria has improved slightly in the last years. Austria is, however, characterised by a high share of medium skilled migrants and a low share of highly skilled migrants. In addition among the pool of migrants in the EU from a given country, Austria generally selects the less qualified. The location decisions of highly skilled migrants are mostly governed by income opportunities, labour market conditions, ethnic networks and a common official language. Over- and under-qualification rates among the foreign born in Austria largely accord with the European average, the largest part of the differences can be explained by differences in qualification and country structure between the foreign born in Austria and the EU. Native-foreign born differentials in employment rates are, however, significantly higher in Austria than in other EU countries.Migration, Migration Policy, Migrant Skill Structure, Integration

How does income inequality influence international migration?

The increasing importance of highly-skilled migration in times of so-called ?skills shortages? is leading to a growing interest in the determinants and characteristics of highly-skilled migration. However, migration theory with regard to the highly-skilled is not well developed. An important strand of literature that clearly serves for the derivation of empirically testable hypotheses about the determinants of particular types of migrants is self-selection theory. This theory dates back to Roy (1951) and has been adopted by Borjas (1987) for the analysis of the relation between the income distribution and the skills of migrants. He concludes that a relatively more equal income distribution in the host country vis-à-vis the source country leads to a negative self-selection of migrants (i.e. the lowly-skilled will be particularly attracted) and vice versa. Borjas has confirmed this hypothesis with data on immigration to the US. Chiswick (1999) and others, however, have questioned these results. Sample-selection biases may arise in single-country analyses and in all studies based on host-country data, due to the impact of host-country specifics such as migration policy, network migration, and the like. Due to a lack of internationally comparable data, however, international empirical studies with data from the origin countries have not been undertaken to resolve the dispute between Borjas and Chiswick. Furthermore, data on the intentions to emigrate (as opposed to actual migration data) has the distinct advantage of being free from the above-mentioned selection-bias problem. This paper sheds some new light on the self-selection controversy by analysing the relationship between country-specific emigration propensities and each country?s score on the Gini-Index on inequality. The 1995 International Social Survey Programme (ISSP) conducted a survey on national identity, which gathers the necessary data in a rich international microdata set. We run probit-regressions with two samples, one including all surveyed persons and one including only the sub-sample of the highly-skilled. By relying on the Gini index as a proxy for wage inequality, the paper follows Borjas? (1987) approach. Borjas, however, proxies skills differentials by income differentials. Chiswick (1999) argues that these two differentials may only be poorly related. The analysis presented here partly avoids this criticism, as we compare the sub-sample of highly-skilled persons with all surveyed individuals and with the medium- and lowly-skilled. A strong positive correlation between skills and income, as predicted by standard economic theory, therefore suffices for the validity of our approach. The main result of this paper is that, ceteris paribus, a more egalitarian income distribution is associated with lower emigration propensities, while income inequality does not have any impact on the emigration propensities of particularly highly-skilled persons. These results seem to contradict Borjas? prediction that the highly-skilled should be particularly attracted by countries which have relatively high returns to skills. Thus, our analysis is more in line with the arguments put forward by Chiswick (1999) and others.

Does higher education help immigrants find a job? : A survival analysis

"We analyse the role that education signals play in the transition rates from unemployment to finding a job. We compare the results for Ethnic Germans with those for foreigners from the same origin countries and Native Germans. In the first case, the two have the same labour market access but different migration backgrounds. In the second case, the migration background is similar, but labour market access is not. We find that Ethnic Germans fare better than foreigners because more of them are able to accredit their foreign degrees and hence can apply for a job as a medium- or high-skilled individual which both have faster transition rates than the low-skilled. However, both foreigners and Ethnic Germans with accredited degrees have similar transition rates. Finally, if education signals are acquired in Germany, the differences between all three groups vanish more or less completely." (Author's abstract, IAB-Doku) ((en))Aussiedler, berufliche Reintegration, Migranten, Deutscher, Arbeitsmarktchancen, Aussiedlerpolitik, Bildungsabschluss - Anerkennung, Integrierte Erwerbsbiografien

How does income inequality influence international migration?

The increasing importance of highly-skilled migration in times of so-called 'skills shortages' is leading to a growing interest in the determinants and characteristics of highly-skilled migration. However, migration theory with regard to the highly-skilled is not well developed. An important strand of literature that clearly serves for the derivation of empirically testable hypotheses about the determinants of particular types of migrants is self-selection theory. This theory dates back to Roy (1951) and has been adopted by Borjas (1987) for the analysis of the relation between the income distribution and the skills of migrants. He concludes that a relatively more equal income distribution in the host country vis-à-vis the source country leads to a negative self-selection of migrants (i.e. the lowly-skilled will be particularly attracted) and vice versa. Borjas has confirmed this hypothesis with data on immigration to the US. Chiswick (1999) and others, however, have questioned these results. Sample-selection biases may arise in single-country analyses and in all studies based on host-country data, due to the impact of host-country specifics such as migration policy, network migration, and the like. Due to a lack of internationally comparable data, however, international empirical studies with data from the origin countries have not been undertaken to resolve the dispute between Borjas and Chiswick. Furthermore, data on the intentions to emigrate (as opposed to actual migration data) has the distinct advantage of being free from the above-mentioned selection-bias problem. This paper sheds some new light on the self-selection controversy by analysing the relationship between country-specific emigration propensities and each country's score on the Gini-Index on inequality. The 1995 International Social Survey Programme (ISSP) conducted a survey on national identity, which gathers the necessary data in a rich international microdata set. We run probit-regressions with two samples, one including all surveyed persons and one including only the sub-sample of the highly-skilled. By relying on the Gini index as a proxy for wage inequality, the paper follows Borjas' (1987) approach. Borjas, however, proxies skills differentials by income differentials. Chiswick (1999) argues that these two differentials may only be poorly related. The analysis presented here partly avoids this criticism, as we compare the sub-sample of highly-skilled persons with all surveyed individuals and with the medium- and lowly-skilled. A strong positive correlation between skills and income, as predicted by standard economic theory, therefore suffices for the validity of our approach. The main result of this paper is that, ceteris paribus, a more egalitarian income distribution is associated with lower emigration propensities, while income inequality does not have any impact on the emigration propensities of particularly highly-skilled persons. These results seem to contradict Borjas' prediction that the highly-skilled should be particularly attracted by countries which have relatively high returns to skills. Thus, our analysis is more in line with the arguments put forward by Chiswick (1999) and others

Skill Premiums and the Supply of Young Workers in Germany

In this paper, we study the development and underlying drivers of skill premiums in Germany between 1980 and 2008. We show that the significant increase in the medium to low skill wage premiums since the late 1980s was almost exclusively concentrated among the group of workers aged 30 or below. Using a nested CES production function framework which allows for imperfect substitutability between young and old workers, we investigate whether changes in relative labor supplies could explain these patterns. Our model predicts the observed differential evolution of skill premiums very well. The estimates imply an elasticity of substitution between young and old workers of about 8, between medium- and low-skilled workers of 4 and between high-skilled and medium/low-skilled workers of 1.6. Using a cohort level analysis based on Microcensus data, we find that long-term demographic changes in the educational attainment of the native (West-)German population – in particular of the post baby boomer cohorts born after 1965 – are responsible for the surprising decline in the relative supply of medium-skilled workers which caused wage inequality at the lower part of the distribution to increase in recent decades. We further show that the role of (low-skilled) migration is limited in explaining the long-term changes in relative labor supplies

Free vs. Restricted Immigration: Bilateral Country Study

This paper tests the differential effects of the generosity of the welfare state under free migration and under policy-controlled migration, distinguishing between source developing and developed countries. We utilize free-movement within the EU to examine the free migration regime and compare that to immigration into the EU from two other groups, developed and developing source countries, to capture immigration-restricted regimes. We standardize cross-country education quality differences by using the Hanushek-Woessmann (2009) cognitive skills measure. We find strong support for the "magnet hypothesis" under the free-migration regime, and the "fiscal burden hypothesis" under the immigration-restricted regime even after controlling for differences in returns to skills in source and host countries

Costs and Benefits of Labour Mobility Between the EU and the Eastern Partnership Partner Countries. Country Report: Germany

This study provides an overview of the situation of migrants from Eastern Partnership (EaP) countries in Germany, with this chapter particularly focusing on the labour market integration of EaP migrants, their access to social assistance and social services, and the impact of these flows on the German labour market. We then provide an informed view of the scope for future increased mobility between Germany and EaP countries, in the light of the skills needs and demographic trends expected in the next 10 to 20 years. Based on the results, the following conclusions can be drawn. More than half of EaP migrants come to Germany for work and study purposes. Family reunification is important for Ukrainians and Moldovans. Work and family purposes are the two main residence grounds for migrants from Moldova and Ukraine, while the other nationalities hold residence permits for reasons of study and work in most cases