Two-way migration between similar countries

Arbeitspapier

We develop a model to explain two-way migration of high-skilled individuals between countries that are similar in their economic characteristics. High-skilled migration results from the combination of workers whose abilities are private knowledge, and a production technology that gives incentives to firms for hiring workers of similar ability. In the presence of migration cost, high-skilled workers self-select into the group of migrants. The laissez-faire equilibrium features too much migration, explained by a negative migration externality. We also show that for sufficiently low levels of migration cost the optimal level of migration, while smaller than in the laissez-faire equilibrium, is strictly positive. Finally, we extend our model into different directions to capture stylized facts in the data and show that our baseline results also hold in these more complex modelling environments.

Object Details

• ISBN: 978-3-86304-199-1
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DICE Discussion Paper ; No. 200

Classification and Topics

• Classification: Wirtschaft ; Asymmetric and Private Information; Mechanism Design ; International Migration
• Subject: International Migration ; Skilled Workers ; Positive Assortative Matching

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kreickemeier, Udo ; Wrona, Jens
• Event: Veröffentlichung
• (who): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (where): Düsseldorf
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/121849
• Last update: 10.03.2025, 11:45 AM CET